The cryptocurrency market continues its downward trajectory. Most major assets are trading in the red zone in the daily and weekly charts. Bitcoin (BTC) is close to falling below $94,000, dipping 2.4% in the last 24 hours. The global crypto market cap has fallen 3.3% in the same time frame to $3.45 trillion.
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Why Is The Cryptocurrency Market Down?
Source: Watcher Guru
This is the second market correction in the last two months. The cryptocurrency market faced a similar correction in December 2024 after inflation in the US increased to 2.7%. The higher inflation figures led the Federal Reserve to take a hawkish stance with its monetary policy. The Fed announced only two interest rate cuts in 2025 instead of three to combat rising inflation. Market participants were quick to liquidate their risky assets like cryptocurrencies.
The cryptocurrency market made a slight recovery in early January. Bitcoin (BTC) reclaimed the $101,000 level. Bullish investors were hopeful about another upswing. The recovery was short-lived, and the market faced another correction.
The latest market correction is likely due to the better-than-expected jobs data in the US. The high figure may thwart any chances of an early interest rate cut. The development may have led to investors liquidating their cryptocurrency holdings.
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Will The Market Recover After Trump’s Inauguration?
Source: Yellowhammer News
There is a possibility that the cryptocurrency market will recover after President-elect Donald Trump assumes office. Trump’s pro-crypto stance may lead to a market-wide resurgence.
Trump has already named a White House “Crypto Czar” and a new SEC chair. Both developments are bullish for the cryptocurrency industry.
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There is also a possibility that the cryptocurrency market will stagnate for the time being. The high job figures and rising inflation may make recovery slow.
