Bitcoin’s price took a sharp dip on Thursday, falling to $94,471 as a wave of bearish sentiment swept through the cryptocurrency market. The decline comes amid hawkish signals from the U.S. Federal Reserve and the looming prospect of large-scale Bitcoin sales by the Department of Justice (DOJ).
A Slower Rate Cut Path Spooks Markets
The Federal Reserve’s December meeting minutes, released earlier this week, signaled a slower pace of interest rate cuts in 2025, dampening investor risk appetite. The central bank cited resilience in the U.S. economy and persistent inflation concerns, warning that protectionist policies under the incoming Trump administration could keep rates higher for longer. These factors have weighed heavily on speculative assets like cryptocurrencies.
DOJ Bitcoin Sales Add Pressure
Bitcoin faced additional selling pressure after reports revealed that the DOJ had secured court approval to sell over 69,370 BTC, worth approximately $6.5 billion. The coins were confiscated in 2014 following the Silk Road marketplace crackdown. Historically, similar government sales have led to price dips, and the anticipation of such a move has added to the bearish tone.
Despite previous speculation that the DOJ might convert its Bitcoin holdings into a national strategic reserve under President-elect Donald Trump, the sale appears to be moving forward.
Market Impact
Bitcoin’s price fell as low as $93,323 during Thursday’s trading session, erasing most of the gains from its early 2025 rally. Broader crypto markets also showed weakness, with altcoins following Bitcoin’s downward trajectory. Ether stabilized at $3,328 after earlier losses, while XRP managed a 2.2% gain, trading at $2.34. Meme coin Dogecoin saw a 3.1% drop, and Solana, Cardano, and Polygon posted declines of up to 6%.
Broader Outlook
With uncertainty surrounding the Fed’s rate policy and the DOJ’s Bitcoin sales, the market may face continued headwinds in the near term. While Trump’s plans to create a national Bitcoin reserve have sparked optimism among some crypto enthusiasts, the timeline and feasibility of such an initiative remain unclear.
Investors and traders will be closely monitoring these developments, as well as upcoming market trends, to gauge the trajectory of Bitcoin and the broader cryptocurrency market.
