BTC has fallen for 4 consecutive days. Has the market bottomed out? Buy the dip or continue to wait and see?

オリジナル | Odaily Planet Daily ( ＠OdailyChina )

著者 | フー・ハウ（ @ヴィンセント 31515173 )

In the past week, the 暗号 market has continued to fall. Yesterday, after the news that the U.S. Department of Justice was approved to sell the $6.5 billion of Bitcoin seized from the dark web Silk Road was released, Bitcoin fell from $94,000 to below $92,000, exacerbating the panic in the market. Several Fed officials also said that they would adjust the interest rate policy, suggesting that the pace of interest rate cuts would be slowed down in 2025 and a tightening policy would be implemented. At the same time, under the influence of the Los Angeles wildfire, some analysts pointed out that many wealthy people sold crypto assets to rebuild their lives after the disaster. The various performances of the market have made investors worried about the future of cryptocurrencies.

Today, Russia also began selling 1,032 ビットコインs seized in the Infraud hacker group case. Under the influence of multiple factors, the crypto market fell again today.

• OKX real-time market data shows that as of the time of writing, BTC has fallen below $92,000 and is currently trading at $93,760, a 24-hour drop of 0.45%;

• In addition to BTC, altcoins led by ETH also faced a significant decline. ETH fell below $3,200 and is currently trading at $3,258, a 24-hour drop of 1.94%. SOL fell below $190 and is currently trading at $189.57, a 24-hour drop of 1.4%.

• The on-chain market is no exception. The AI Agent sector, which was popular in the early stage, has collectively pulled back. According to GMGN market, AI Agent tokens continued to fall. Among them: ai16z fell 23.05% in 24 hours, and the current market value is 1.68 billion US dollars; FARTCOIN fell 31.09% in 24 hours, and the current market value is 919 million US dollars; ZEREBRO fell 41.92% in 24 hours, and the current market value is 329 million US dollars.

Affected by the overall upward trend, the total market value of cryptocurrencies has also fallen rapidly. According to CoinGecko data, the total market value of cryptocurrencies has fallen to $3.4 trillion, a 24-hour drop of 3.4%. Cryptocurrency users trading enthusiasm has also declined. 代替案 panic and greed index reported 50 today, and the level has changed from greed to neutral.

デリバティブ取引に関しては、 コイングラス data shows that in the past 24 hours, the entire network has a liquidation of US$375 million, of which long orders have a liquidation of US$260 million and short orders have a liquidation of US$115 million. In terms of currency, BTC has a liquidation of US$99.7435 million and ETH has a liquidation of US$6966.81.

Below, Odaily Planet Daily analyzes the reasons for the recent market decline and future trends.

Multiple factors led to the decline in the market

Los Angeles wildfire caused post-disaster reconstruction, cryptocurrency becomes the fastest way to cash out

Recently, the raging wildfires in Los Angeles have not only caused huge property losses to local residents, but also had a significant impact on the cryptocurrency market. According to Coinbase data, after the wildfires broke out, the volume of Bitcoin transactions from Los Angeles and surrounding areas surged, especially large transactions, reflecting that some affected families were eager to cash in their crypto assets to meet the funding needs of post-disaster reconstruction.

According to local real estate market analysts, many wealthy families hold cryptocurrencies such as Bitcoin and Ethereum, and usually regard them as an important part of their investment portfolio. However, under the devastation of wildfires, they have to quickly liquidate these assets.

The head of a blockchain research institute in Los Angeles also pointed out that the recent price fluctuations in the market may be related to this large-scale asset sell-off. In particular, in the context of technology professionals and high-net-worth individuals generally holding a high proportion of crypto assets, the surge in short-term funding demand after the disaster has intensified the selling pressure in the market. In addition, analysts warn that short-term selling may have a negative impact on the stability of the cryptocurrency market.

US Department of Justice gets approval to sell $6.5 billion in seized Silk Road Bitcoin

The U.S. Department of Justice has been approved to deal with 69,370 bitcoins related to the famous Silk Road case, with a current market value of approximately $6.5 billion. The news caused market volatility, and some investors worried that the sale of this bitcoin may conflict with Trumps plan to build a bitcoin reserve. However, Trader T said on the X platform: It may take several months from approval to actual sale , and the court has already made a liquidation plan for 30,000 BTC in 2023.

Meanwhile, BitMEX co-founder Arthur Hayes said on the X platform that the diamond hands in the market are ready to buy at the bottom at this time . CryptoQuant CEO Ki Young Ju also pointed out that about $379 billion entered the market last year, equivalent to about $1 billion a day, so the $6.5 billion in Bitcoin sold by the US government may be absorbed by the market in just one week, and investors do not need to worry too much. Salvadoran President Nayib Bukele humorously said that perhaps we all have the opportunity to buy Bitcoin at a discount.

Coindesk analyst James Van Straten believes that the markets concerns about the sell-off may be exaggerated. If these 69,370 bitcoins are actually sold, they may be sold in an orderly manner to obtain the best price possible. And the market has long anticipated this situation, so this potential risk may have been digested.

The Feds rate cut pace slows down in 2025

Recently, the Federal Reserves monetary policy has changed, mainly reflected in the slowdown in the pace of interest rate cuts. Boston Fed President Collins said that considering the current strong employment data and continued inflationary pressure, she believes that the rate cut in 2025 will be smaller than the market expected. Specifically, Collins supports the Fed to cut interest rates twice in 2025, rather than the previously expected four times. This change reflects the Feds cautious attitude towards the economic situation.

The Federal Reserve faces the challenge of strong economic growth and inflation above 2% in the current economic environment. Kansas Fed President Schmid pointed out that the current economic situation is close to achieving the dual goals of price stability and full employment. He believes that the policy should remain neutral and the interest rate should be close to the long-term level. Schmid emphasized that further adjustments to monetary policy will only be made when data changes significantly.

In addition, Federal Reserve Board Governor Bowman mentioned in a recent speech that she supports last months decision to cut interest rates and believes that this is the last step of the Feds monetary policy adjustment. She pointed out that inflation risks still exist, so future monetary policy decisions will remain cautious.

The challenge for the Fed is that despite the current strong economic performance, it will be difficult to stabilize inflation at the target level of 2%. Schmid predicts that the Fed may not achieve this goal until 2026.

From the perspective of market expectations, according to CMEs Fed Watch data, investors generally believe that the probability that the Fed will maintain the current interest rate unchanged in January 2025 is 93.1%. In the coming months, although the probability of interest rate cuts has increased, the markets expectations for the Feds policies are relatively cautious.

Overall, the Feds monetary policy has been adjusted, and the pace of interest rate cuts has slowed down, reflecting the Feds cautious assessment of the current economic situation. Although future interest rate cuts may still continue, the market expects that this process will be slower and more cautious.

After 10 days, the trend of crypto market may become clear

In the next 10 days, the trend of the cryptocurrency market may usher in a key turning point. Although market sentiment remains sluggish and investor confidence is slightly weak in the near term, there are many signs that the crypto market is expected to usher in a round of recovery in 2025. According to Reuters, industry insiders revealed that the cryptocurrency industry is actively lobbying the US government to ask the Trump administration to issue an executive order within 100 days of taking office to establish a US Bitcoin reserve. The move aims to ensure that the crypto industry has access to banking services and plans to establish a dedicated cryptocurrency advisory committee. Sources expect that the order may be issued as early as January 20, 2025. This action may provide new policy support for the crypto industry and become a catalyst for the market recovery.

一方で、 the fundamentals of the crypto market remain strong . Data from IntoTheBlock shows that despite the overall market downturn, the net outflow trend of centralized exchanges (CEX) continues. Data shows that more and more investors choose to hold assets for the long term rather than panic sell due to short-term price fluctuations. This phenomenon shows that there is still strong confidence in the market and investors are optimistic about the future growth potential of crypto assets. These behaviors reflect that investors are positive about the long-term development of cryptocurrencies and expect the market to recover after a short-term adjustment.

加えて、 the regulatory environment for altcoins is expected to improve in 2025. Andrew Baehr, managing director of CoinDesk, pointed out that altcoins will benefit from changes in the regulatory environment for cryptocurrencies in 2025, especially the SECs possible relaxation of regulatory pressure on altcoins, which will provide a more relaxed policy environment for the launch of more crypto projects. Improved regulation will help attract more projects to the market and may also further promote the healthy development of the market.

ついに、 the integration trend of AI and cryptocurrency will become more and more obvious . With the participation of Web2 giants, the underlying technology of AI in the field of encryption will be further strengthened. Members of industry leaders such as Coinbase, Google, and a16z have jointly launched the Aiccelerate project. This decentralized autonomous organization (DAO) aims to accelerate the deep integration of cryptocurrency and artificial intelligence technology. AI technology is expected to play an increasingly important role in the development, transaction execution, risk management, and other aspects of blockchain projects, bringing more innovation and changes to the encryption industry.

To sum up, although the current market environment is relatively difficult, with the gradual implementation of policy support, the recovery of investor confidence and the promotion of AI technology, the cryptocurrency market in 2025 is expected to gradually recover and may usher in a new peak of development.

This article is sourced from the internet: BTC has fallen for 4 consecutive days. Has the market bottomed out? Buy the dip or continue to wait and see?

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