The cryptocurrency market has faced a significant correction over the last few weeks. Bitcoin (BTC) has lost substantial momentum, falling below $94,000. BTC’s descent may be why the larger market is down. The original crypto climbed to a new all-time high of $108,135 on Dec. 17, 2024. Since its latest peak, BTC’s price has fallen by nearly 14%. The global crypto market cap has also dipped by 3.3% in the last 24 hours to $3.41 trillion.
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Why Is The Cryptocurrency Market Down?
The latest market correction came after inflation in the US increased to 2.7%. The Federal Reserve also took a hawkish stance for its monetary policy. The Fed announced two interest rate cuts for 2025 instead of the expected three. This move may have spooked market participants away from risky investments like cryptocurrencies.
There is also a possibility that many cryptocurrency investors began to book profits after Bitcoin (BTC) climbed to its new all-time high. This development may have also led to a price dip.
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Will The Market Recover In January 2025?
There is a high chance that the cryptocurrency market will begin to gain traction in January 2025. US President-elect Donald Trump will have his inauguration on Jan. 20, 2025. The crypto market may begin an upward ascent after or just before the inauguration. Trump has been very supportive of the crypto space. He has named a new SEC chair and a White House “crypto czar.” Both developments could propel the market to new heights.
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According to cryptocurrency screening platform CoinCodex, BTC will hit a new all-time high of $115,085 on Jan. 19, 2025. Reaching $115,085 from current price levels will translate to a rally of about 23.58%. The platform anticipates the original crypto to continue its rally throughout the first three months of 2025, hitting $139,463 on Mar. 25, 2025.