"Bitcoin is experiencing a challenging week, marked by a significant pullback that has pushed the cryptocurrency down more than 20% from its all-time high reached in October. This move places the digital asset in bear market territory, reflecting a notable shift in investor sentiment. Over the course of the week, the accumulated decline exceeded 9%, highlighting a substantial loss of momentum amid greater caution in global markets and a preference for defensive assets."
"On the macroeconomic front, uncertainty in the United States has contributed to an even more volatile environment. The government shutdown has delayed the release of key economic data, leaving investors with less visibility regarding the country's economic health. Additionally, the recent increase in corporate layoffs has raised expectations that the Federal Reserve may cut rates in December to ease financial conditions. However, the lack of clarity regarding the timing and magnitude of such a move continues to foster caution in the market."
"At the political level, President Donald Trump has attempted to create a favourable narrative around Bitcoin, stating his intention to position the United States as a "Bitcoin superpower." This approach seeks to promote a more flexible and competitive regulatory framework compared to other jurisdictions. However, no concrete measures, such as direct government purchases of Bitcoin, have been announced so far, which limits the market's impact of these statements."
Bitcoin has fallen more than 20% from its October all-time high, placing the asset in bear market territory. The accumulated weekly decline exceeded 9%, signaling a loss of momentum as investors favor defensive assets. A broad sell-off in technology stocks, mixed earnings, and valuation concerns prompted rotation into safer assets, spilling into crypto markets where Bitcoin often gauges sentiment. Uncertainty in the United States, including a government shutdown that delayed key economic data and rising corporate layoffs, increased volatility and raised expectations that the Federal Reserve may cut rates in December, though timing and magnitude remain unclear.
Read at London Business News | Londonlovesbusiness.com
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