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Bitcoin extended its losing streak to a third day on Friday, retreating 3.7% to trade at $97,002.0 by 00:46 ET (05:46 GMT). The decline comes in the wake of the Federal Reserve’s hawkish monetary policy signals and profit-taking after the cryptocurrency reached record highs earlier in the week.
Bitcoin Pullback Following Record Highs
- All-Time High and Profit-Taking: Bitcoin hit an all-time high of $108,244.9 on Tuesday but has since seen a sharp pullback due to profit-taking and growing macroeconomic uncertainty.
- Hawkish Fed Impact: The Federal Reserve’s decision to slow the pace of rate cuts in 2025, coupled with a forecast of only two cuts compared to the previously expected four, has weighed heavily on speculative assets like Bitcoin.
Fed Comments and Strategic Bitcoin Reserve Doubts
- Jerome Powell’s Remarks: Fed Chair Jerome Powell dismissed the idea of the central bank participating in a Strategic Bitcoin Reserve, a proposal floated by incoming President Donald Trump in a recent interview.
- Market Impact: Powell’s stance reinforced concerns over regulatory hurdles for government involvement in Bitcoin, further dampening market sentiment.
El Salvador Stays Committed to Bitcoin Despite IMF Concerns
- IMF Agreement: El Salvador has agreed to scale back Bitcoin’s role in its economy to secure a $1.4 billion loan from the International Monetary Fund.
- Continued Bitcoin Purchases: Despite the IMF’s warnings, President Nayib Bukele stated that the country will accelerate Bitcoin purchases, with the recent rally boosting the valuation of its holdings.
Altcoins Suffer Steeper Losses
Broader cryptocurrency markets also tumbled sharply, with altcoins experiencing even larger declines than Bitcoin:
- Ethereum (ETH): Fell 7.5% to $3,3379.39, marking its fourth consecutive day of losses and a 15% weekly decline.
- XRP: Dropped 2.5% to $2.3009.
- Solana and Polygon: Declined by 6.4% and 7%, respectively.
- Cardano (ADA): Plunged more than 8% to trade at $0.8965.
- Dogecoin (DOGE): Among meme tokens, Dogecoin suffered the steepest drop, falling 11.2% to $0.3199.
Outlook
The cryptocurrency market continues to face headwinds from tightening monetary policies, regulatory uncertainties, and profit-taking after significant rallies. While Bitcoin’s retreat below the $100,000 mark reflects broader risk-off sentiment, El Salvador’s ongoing commitment to the asset signals that crypto adoption remains uneven globally.
Altcoins, which are traditionally more volatile, are likely to remain under pressure as traders reassess their positions in light of a hawkish Fed outlook.
