Crypto Markets Witness Bloodbath as Bitcoin, Altcoins Plunge
The cryptocurrency markets witnessed a turbulent start to the week as Bitcoin (BTC) briefly retreated to $94,000, sparking a widespread crash. A staggering $1.5 billion in crypto derivatives positions were liquidated due to BTC's sharp decline. The price eventually recovered and briefly surpassed $98,000 before falling back below $97,000 to its current level of $96,878. BTC's abrupt drop sent shockwaves through the market, causing other altcoins to experience even more substantial declines.
While BTC has fallen by nearly 3% in the past 24 hours, Ethereum (ETH) plummeted by over 6% after failing to break past $4,000 and is currently trading just below $3,700. Ripple (XRP) witnessed a staggering 13% drop and now stands at $2.14. Meanwhile, Solana (SOL) is down over 7% as bearish sentiment persists, with the price falling to $215. Dogecoin (DOGE), Cardano (ADA), Tron (TRX), Avalanche (AVAX), Toncoin (TON), Chainlink (LINK), Polkadot (DOT), Stellar (XLM), Uniswap (UNI), and Litecoin (LTC) all suffered double-digit losses, further contributing to the market's bloodshed. The total crypto market capitalization has declined by nearly 6% to $3.44 trillion.
El Salvador Scales Back Bitcoin Ambitions Due to IMF Agreement
El Salvador is nearing an agreement with the International Monetary Fund (IMF) for a $1.3 billion loan. However, a key condition of the loan is a reduction in the country's use of Bitcoin (BTC) as legal tender. A team from the IMF is currently in El Salvador to finalize the agreement with President Nayib Bukele's government. Once finalized, the deal will unlock $1 billion from the World Bank and $1 billion from the Inter-American Development Bank.
The loan is expected to bring El Salvador back into the international financial community after years of isolation following its adoption of BTC as legal tender. The IMF has consistently opposed the move, citing risks to financial stability and integrity, and has urged Bukele's government to cease accepting crypto as legal tender. Under the terms of the agreement with the IMF, El Salvador will make it optional for businesses to accept BTC as payment. It will also commit to reducing its budget deficit by three percentage points of GDP through spending cuts and tax increases. Additionally, the country must pass an anti-corruption law and increase its reserves from $11 billion to $15 billion.
US Can Become Crypto Superpower, Says Eric Trump
Eric Trump, executive vice president of the Trump Organization, believes that the US can become a cryptocurrency superpower with the right regulatory guidelines. He expressed his support for crypto and stated that his father, former President Donald Trump, intends to make America the crypto capital of the world if re-elected. Eric's comments follow BTC's recent突破 of the $100,000 mark, which market observers hailed as a significant milestone for crypto.
"The modern banking system is outdated," said Eric Trump. "It's just a matter of time before crypto not only catches up but really leaps ahead. And so, we're incredibly excited on a lot of fronts. I think America will be the crypto capital of the world. I fully support it, my father fully supports it, and our family is fully embracing it. We believe in DeFi, and we believe that's the way of the future. America better lead the way, otherwise, we are going to leave a lot behind."
President-elect Donald Trump has recently nominated Paul Atkins to lead the United States Securities and Exchange Commission (SEC). Atkins, known for his crypto-friendly views, will replace Gary Gensler. Eric was also asked about his father's plans for regulating or deregulating crypto and what such policies might look like in practice.
"It looks like it's transparent. That's what it is," said Eric. "The people in the crypto industry are frustrated that no one's ever put together a sensible plan as to how to regulate an industry. They're fine with regulation, but they just want guidelines, and they've said that. We will have a clear road map, and hopefully, the rest of the world will follow that. Hopefully, we can lead by example because that's what we should do as Americans. And hopefully, we truly are the crypto superpower of the world."
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) experienced a dramatic fall amidst a broader crypto market rout, amplifying losses for crypto traders. The sharp drop is attributed to souring risk sentiment due to geopolitical tensions and uncertainty surrounding US interest rates. Additionally, BTC faced significant profit-taking after crossing the coveted $100,000 threshold. Traders also locked in their gains in other major altcoins.
The crypto market has been influenced by positive developments, such as the nomination of crypto-friendly candidates for key cabinet and regulatory positions. However, doubts have been raised about the level of regulatory support Trump may provide, with analysts dismissing the idea of a strategic reserve under his leadership.
BTC's price chart indicates a substantial decline over the past few sessions, dropping below key support levels. The asset's bullish momentum has waned, especially after setting a new all-time high last week, as traders secured their profits and geopolitical factors impacted market sentiment. BTC began the previous week in the red, falling 1.25% on Monday and registering a slight decline on Tuesday, closing at $95,751 after briefly dipping below the 20-day SMA. However, it made a strong recovery on Wednesday, rising by nearly 3% and closing at $98,851. BTC faced unprecedented volatility on Thursday as it surpassed the critical $100,000 milestone, setting a new all-time high of $103,900. However, buyers quickly lost momentum at this level, and the price fell back, dropping below the 20-day SMA to a low of $92,285 before recovering and closing at $97,093.
Source: TradingView
Despite experiencing considerable volatility on Thursday, BTC recovered on Friday, rising by almost 3% and closing at $99,695. With sellers active at $100,000, BTC managed only a marginal increase on Saturday, moving to $99,728. BTC broke past the $100,000 mark again on Sunday, rising by 1.32% to $101,043. However, BTC and the broader crypto market experienced a significant decline on Monday. BTC plummeted below the 20-day SMA to an intraday low of $94,177. Nevertheless, it recovered from this level to climb above the 20-day SMA and close at $97,267, a decline of approximately 4%. BTC has remained bearish during the current session, with the price slightly down after recovering from an intraday low of $95,687.
BTC faces resistance at $98,000. If buyers regain control, BTC could reclaim $100,000 and push towards its all-time high. Conversely, if sellers retain control, BTC could drop to $95,000 once again.
Ethereum (ETH) Price Analysis
Ethereum (ETH) also suffered a significant decline this week amid the crypto market crash. ETH had a bullish start to the previous week despite a bearish beginning, falling by nearly 2% and closing at $3,645. Sellers maintained control on Tuesday as ETH dropped by 0.76% and closed at $3,617. Despite substantial selling pressure, ETH rebounded on Wednesday, rising by over 6% to surpass $3,700 and closing at $3,844. ETH faced significant volatility on Thursday as buyers and sellers struggled for control. Consequently, ETH fell to an intraday low of $3,644 and rose to an intraday high of $3,957 before closing at $3,787 after experiencing a decline of 1.48%.
Source: TradingView
The price recovered on Friday as it surged past $4,000 and reached an intraday high of $4,093. However, buyers lost momentum at this level, and ETH eventually closed at $4,003 after an increase of nearly 6%. With sellers active at this level, ETH registered a slight
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