Despite a decline in global equity indices, Bitcoin has managed to stay above the $95,000 barrier. This is all due to the markets processing the Federal Open Market Committee (FOMC) meeting that took place on December 18. According to analysts, Federal Reserve Chair Jerome Powell signaled a slower pace of monetary easing in 2025.
While major equities indices have fallen each week, the market capitalization of the most prominent digital asset has fallen as well. “The past two weeks following the FOMC have been met by global de-risking, and bitcoin has faced negative two-week returns of 11%, whereas ether has declined by 15%, pushing the ETH/BTC down toward 0.036,” K33 Head of Research Vetle Lunde stated.
December’s FOMC meeting
Vetle blamed the Dec. 18 FOMC meeting for the decline. At the meeting, the U.S. Federal Reserve’s dot plot was changed to indicate two rate cuts in 2025, down from four expected in September. Fewer predicted interest rate reductions hurt risky assets like Bitcoin because they boost the market. In the press conference, authorities acknowledged probable inflationary pressures from a Trump presidency, a change from the November press conference.
“While the Fed has cut rates by 100 basis points since September, the 10-year treasury note has grown by 100 basis points, signaling that the market anticipates inflationary impulses ahead,” he said. Since the FOMC meeting, Bitcoin has seen major ETF withdrawals, and MicroStrategy has slowed its buying. Since mid-December, these factors have slowed bitcoin’s ascent from Nov. 5. The cryptocurrency has found support at $91,000, its Nov. 26 low.
Christmas trading slowdown
Because of the holiday season’s decreased liquidity, bitcoin spot trading has been highly unpredictable, according to analysts at QCP Capital. “Any upside recovery over the past couple of days has been capped by persistent selling pressure,” as reported by analysts. “Momentum in bitcoin has clearly fizzled as the year ends, with $1.8 billion of net outflows from spot ETFs since Dec. 19.”
The analysts further emphasized that the market attitude is reflected in the lackluster performance of crypto. Bitcoin Holds Above. As markets prepare for 2025 and increased uncertainty over global trade, the S&P 500 and Nasdaq have both fallen about 1% for the third time in eight days.
Holiday Slump in Bitcoin Trading Volumes
The holiday season saw a drop in trade volumes across all major exchanges to pre-election levels, according to K33 Research. Bitcoin Holds Above, “Seven-day average daily spot volumes currently sit at $3.4 billion, the lowest recorded seven-day volume since Nov. 5,” Lunde pointed out.
Typical of bitcoin, according to K33 Research statistics, trade volume is low over the winter holidays. The trading holidays in exchange-traded funds (ETFs) and less activity on the CME have intensified this year’s Christmas slump. “Further, MicroStrategy’s softened bitcoin purchases have further pulled volumes into a more docile terrain,” the analyst said.
Summary
Bitcoin has stayed above $95,000 despite a global equity decline, following signals from the Federal Reserve’s December meeting about slower monetary easing in 2025. This has negatively impacted risk assets like Bitcoin and Ether, with Bitcoin seeing an 11% drop over two weeks.
The Fed’s revised outlook, along with inflation concerns and rising treasury note yields, has led to a bearish market. The holiday season also slowed Bitcoin Holds Above, with reduced liquidity and persistent selling pressure. Bitcoin’s trading volumes have dropped to pre-election levels, further dampening momentum as the market prepares for 2025.
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