Crypto Prices Face Turbulence on Monday

Crypto prices are experiencing a rocky Monday due to poor U.S. macroeconomic data and rampant profit-taking.

Bitcoin (BTC)

Bitcoin has dropped 1.8% in the past 24 hours to $91,800, a price not seen since December 5, the day it broke through $100,000 for the first time. The largest cryptocurrency has fallen more than 14% from its December 17 record of $108,278.

Ether (ETH)

Ether has lost less, falling 0.7% to $3,320, though it’s now 17% below its December highs and still has not surpassed the record $4,820 it hit in 2021.

Solana (SOL)

Solana is also proving to be a little stronger than bitcoin, with the SOL/BTC ratio up 0.35% today.

Market Overview

The CoinDesk 20, an index of the top 20 cryptocurrencies by market capitalization (excluding stablecoins, memecoins, and exchange coins), is also in the red, sliding 3.74%. Ripple (XRP) and Stellar (XRM) have taken the biggest hits, down 6% and 6.3% respectively, while litecoin (LTC) is down 1.9%.

Stock Impact

Stocks of crypto-related companies also took a hit. MicroStrategy (MSTR) and Coinbase (COIN) fell 7% and 5.3%, respectively, while major bitcoin mining firms like MARA Holdings (MARA) and Riot Platforms (RIOT) have dropped more than 7%.

Profit-Taking and Economic Factors

The selling pressure is partially caused by investors cashing out after bitcoin surged more than 117% this year. Profit-taking currently exceeds $1.2 billion on a seven-day moving average, significantly lower than the December 11 peak of $4 billion but still more than usual. Most profits are being taken by long-term bitcoin holders.

Macroeconomic factors also weigh on the market. The U.S. Chicago PMI, which measures the performance of various sectors, has shown its lowest reading since May, indicating an economic slowdown.

Uncertainty around the Federal Reserve’s interest-rate policy heading into 2025 is adding to the pressure, with indications that rate cuts will pause until at least March. Market movements may also be influenced by the upcoming inauguration of President-elect Donald Trump on January 20. Consequently, the S&P 500, Nasdaq, and Dow Jones are all down more than 1%.

Expert Outlook

“The market exceeded expectations in 2024, but signs of exhaustion signal the need for consolidation,” stated Joe Carlasare, partner at Amundsen Davis. “Looking ahead to 2025, I’m optimistic but expect the path to diverge from consensus, as markets often do. Bitcoin’s adoption continues to grow, and I anticipate it will generally move in line with traditional markets. If the U.S. avoids a significant growth slowdown, bitcoin should perform well, though the ride may be bumpier than in 2024.”