Why Did Bitcoin Price Drop Today? Analyst Explained the Real Reason

investors cryptocurrencies and by divesting growth-oriented assets, including technology stocks. Bitcoin Today, it extended its losses and briefly fell below $90,000.

According to Coin Metrics, the largest cryptocurrency was last traded at $92,567.84 and is down 2% on the day. Recently, Bitcoin fell as low as $89,259.00, marking a 9% decline in the past week.

Ethereum It fared worse, losing 7%, while the overall crypto market, as measured by leading indices, fell more than 5%. Shares of crypto-related companies also felt the impact, with Coinbase falling 4%, MicroStrategy falling 3%, and Marathon Digital Holdings and Core Scientific falling 4% and 2%, respectively.

The cryptocurrency sell-off was triggered last week by a combination of stronger-than-expected U.S. employment data and concerns about President-elect Donald Trump’s proposed tax plans. These developments pushed bond yields higher and pushed the US dollar higher, putting pressure on Bitcoin and other risky assets.

“The need for liquidity is driven by currency increases due to strong end-of-year U.S. economic numbers, a strong stock market rally, and other places where money is needed in the short term,” said James Davies, co-founder and CEO of Crypto Valley Exchange. If we want it to act like a currency, we have to accept the times when it does, and this is one of those times. “The strength of the US dollar puts pressure on everything else, including Bitcoin.”

Investor optimism was high heading into 2025 with hopes of a pro-crypto Congress and administration. However, recent macroeconomic headwinds have overshadowed these expectations, and analysts have warned of increased volatility for crypto markets in the first quarter.

Bitcoin soared 120% in 2024 on increased institutional adoption and market enthusiasm, but started the new year on a weaker note, falling 3% to date.

*This is not investment advice.