Macroeconomic concerns and widespread profit-taking are putting pressure on the crypto market as the year draws to a close.
Cryptocurrency prices are facing a turbulent Monday, impacted by disappointing U.S. macroeconomic data and continued profit-taking. Bitcoin (BTC) has dipped 1.8% in the past 24 hours, now sitting at $91,800 — a level not seen since Dec. 5, when it first surpassed the $100,000 mark. The leading cryptocurrency has dropped more than 14% from its record high of $108,278 on Dec. 17.
Ether (ETH) has fared slightly better, down 0.7% to $3,320. However, it remains 17% below its December peak and has yet to surpass its 2021 high of $4,820. Solana (SOL) is proving somewhat more resilient than Bitcoin, with the SOL/BTC ratio up 0.35% today.
The CoinDesk 20 index, which tracks the top 20 cryptocurrencies by market capitalization (excluding stablecoins, memecoins, and exchange tokens), is also in the red, falling 3.74%. Ripple (XRP) and Stellar (XLM) are among the biggest losers, down 6% and 6.3% respectively, while Litecoin (LTC) has shown more resilience, down just 1.9%.
Shares of crypto-related companies are also under pressure. MicroStrategy (MSTR) dropped 7%, and Coinbase (COIN) fell 5.3%, while major bitcoin mining companies such as MARA Holdings (MARA) and Riot Platforms (RIOT) each saw declines of over 7%.
The selling trend is partly driven by profit-taking, with many investors cashing out after Bitcoin surged more than 117% this year. The current profit-taking rate is above $1.2 billion on a seven-day moving average, though it’s lower than the Dec. 11 peak of $4.0 billion. Nonetheless, it remains well above the typical level, with long-term holders of Bitcoin accounting for the bulk of the profit-taking.
Macroeconomic factors are also weighing on the market, particularly after the U.S. Chicago PMI — which gauges the performance of the manufacturing and non-manufacturing sectors in the Chicago area — posted its lowest reading since May. This suggests that an economic slowdown may be underway.
Further uncertainty stems from the Federal Reserve’s interest rate policy heading into 2025, with the central bank signaling it will pause rate cuts until at least March. The upcoming inauguration of President-elect Donald Trump on Jan. 20 may also be contributing to market jitters. The S&P 500, Nasdaq, and Dow Jones are all down more than 1%.
“The market exceeded expectations in 2024, but signs of exhaustion are pointing toward the need for consolidation,” said Joe Carlasare, a partner at Amundsen Davis. “Looking ahead to 2025, I’m optimistic but expect the path to diverge from consensus, as markets often do. Bitcoin adoption continues to grow, and I expect it will generally move in line with traditional markets. If the U.S. avoids a major growth slowdown, Bitcoin should perform well, though the journey may be bumpier than in 2024.”
