Bitcoin has demonstrated resilience by maintaining a level above $95,000 despite a drop in global stock indices.
This trend coincides with the assessment of the December 18 Federal Open Market Committee (FOMC) meeting outcomes, during which Fed Chair Jerome Powell indicated a slower pace of quantitative easing until 2025.
Nevertheless, the leading cryptocurrency by market capitalization is not impervious to broader market influences. Over the past week, Bitcoin, along with major stock indexes, has experienced a downturn, resulting in a two-week negative return of 11%, as reported by K33 Head of Research Vetle Lunde. Ethereum (ETH) has faced even greater challenges, declining by 15% in the same period, pushing the ETH/BTC ratio to 0.036.
In a recent publication, K33 Research emphasized Bitcoin’s significant correlation with global equity markets, particularly the Nasdaq. The 30-day correlation between BTC and the Nasdaq has surpassed 0.50, marking the first instance of such a correlation since late September.
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The December 18 FOMC meeting was described as a pivotal moment for risk assets, including Bitcoin. During the meeting, the Fed adjusted its 2025 rate cut projections from four to two. While rate cuts typically stimulate markets, the reduced number of anticipated cuts tempered optimism for risk assets.
Moreover, Powell’s statements during the press conference hinted at potential inflationary pressures stemming from a potential Trump presidency, contrary to the Fed’s messaging in November. Lunde remarked, “Despite the Fed’s 100-basis-point interest rate cuts since September, the 10-year Treasury note has increased by an equivalent amount, suggesting an expected inflationary influence.”
Bitcoin’s momentum was further disrupted by notable outflows from exchange-traded funds (ETFs) and decreased buying activity from major entities like MicroStrategy. Since mid-December, the digital asset has struggled to reclaim its previous upward trajectory, finding support at $91,000, a recent low on November 26.
The subdued performance of Bitcoin mirrors the broader market sentiment, with the S&P 500 and Nasdaq each registering their third 1% decline within eight sessions amid uncertainties surrounding global trade in 2025. Trading volumes on major cryptocurrency exchanges have also dwindled, with the seven-day average daily spot volume dropping to $3.4 billion, the lowest level since November 5, according to K33 Research.
Lunde attributed the slowdown to the typical seasonal effects of the holiday period, exacerbated by reduced activities in ETFs and the Chicago Mercantile Exchange (CME). “MicroStrategy’s reduced Bitcoin acquisitions have also contributed to the decline in trading volumes,” he added.
*This translation does not constitute investment advice.
