Bitcoin Slides Amid Macro Jitters, Mining Stocks Tumble; Analysts Predict Short-Term Recovery
Bitcoin (BTC) wiped out its early-2025 gains on Wednesday as macroeconomic concerns and a global bond sell-off intensified a crypto market downturn.
The leading cryptocurrency hit a session low of $92,600 during U.S. trading hours, marking a nearly 10% drop over two days from its Monday peak above $102,000. BTC has since recovered slightly, trading at $94,300, though still down 2.5% in the past 24 hours.
Among the hardest-hit assets were Cardano’s ADA, Render’s RNDR, and Aptos’ APT, which led declines in the CoinDesk 20 Index. The benchmark index fell over 3% during the same period.
Liquidations and Stock Losses
The sharp two-day sell-off triggered liquidations of nearly $1 billion in leveraged crypto derivatives positions, primarily affecting long traders betting on higher prices, according to CoinGlass. Despite the pullback, bitcoin remains up 1% from its January 1 opening price.
Crypto-related stocks also faced significant declines. Bitcoin mining firms such as TeraWulf (WULF), Bit Digital (BTBT), Bitdeer (BTDR), Iris Energy (IREN), and Hut 8 (HUT) posted losses of 5%-8%. Medical devices company Semler Scientific, which adopted a bitcoin treasury strategy similar to MicroStrategy (MSTR), dropped nearly 10% on the day, extending its weekly loss to 15% and falling 40% from its late December high. MicroStrategy itself slid 2.2% on Wednesday.
Macro Headwinds
Analysts caution that January could remain turbulent for crypto markets, citing potential macroeconomic challenges, including a hawkish Federal Reserve, surging long-term government bond yields, persistent inflation, and the looming threat of a U.S. government shutdown.
Tuesday’s robust U.S. economic data triggered the latest sell-off, leading investors to reassess expectations for further rate cuts this year. Despite Fed Governor Christopher J. Waller voicing support for additional rate reductions, investor sentiment remained unchanged, as CME’s FedWatch tool indicated.
Minutes from the Federal Reserve’s most recent policy meeting, released Wednesday, revealed concerns about inflationary risks and the potential impact of President-elect Donald Trump’s proposed tariffs.
Bitcoin’s Next Move
With bitcoin nearing the lower end of its trading range since late November, analysts see the potential for a short-term bounce. Bob Loukas, a well-known cross-asset trader and founder of Station3 NYC, suggested in an X post that BTC could remain rangebound before breaking higher.
“It doesn’t have to be overly bearish,” Loukas wrote. “But we might need more time to consolidate and get comfortable with $100K levels before moving decisively upward.”
Upcoming economic data, including Friday’s U.S. non-farm payroll report and the Federal Reserve’s meeting later this month, are expected to shape bitcoin’s trajectory. Hedge fund QCP Capital remains optimistic, predicting a rally as Trump’s inauguration on January 20 approaches.
“Bitcoin’s pullback appears to be a temporary pause,” QCP analysts said in a Telegram broadcast. “We anticipate a bullish rally as Trump’s inauguration fuels market optimism.”
