Bitcoin Drops Below $93K Amid Crypto Market Selloff; Analysts Eye Potential Relief Rally
Bitcoin (BTC) tumbled below $93,000 on Wednesday as a global rise in bond yields and macroeconomic concerns weighed heavily on the cryptocurrency market. BTC touched a low of $92,600 during U.S. trading hours, marking a nearly 10% drop from its recent high of $102,000 earlier this week. It has since rebounded slightly to $94,300 but remains down 2.5% over the past 24 hours.
Altcoins also suffered, with significant losses seen in Cardano (ADA), Render (RNDR), and Aptos (APT), driving a 3% decline in the CoinDesk 20 Index.
Bond Yields and Economic Data Drag Markets Lower
Rising global bond yields continue to exert pressure on risk assets, including cryptocurrencies. The U.S. 10-year Treasury yield hit 4.70% this week, nearing its highest levels in years, while the U.K.’s 30-year Gilt yield soared to 5.35%, its highest point since 1998. Other nations, including Japan and Germany, have experienced similar upward trends in yields, reflecting heightened investor caution.
Tuesday’s release of stronger-than-expected U.S. economic data further dampened sentiment, reducing expectations for Federal Reserve rate cuts in 2025. Minutes from the Fed’s latest meeting showed officials expressing concerns about persistent inflation and the potential economic impact of proposed tariffs under President-elect Donald Trump’s administration.
Crypto Stocks Take a Hit
The selloff extended to crypto-related stocks, with miners such as TeraWulf (WULF), Bit Digital (BTBT), and Hut 8 (HUT) posting losses of 5%-8%. Semler Scientific, a medical devices firm with bitcoin holdings, plummeted 10% and is now down 40% from its December highs. MicroStrategy (MSTR), the largest corporate bitcoin holder, declined 2.2% on Wednesday.
Additionally, the two-day crypto slump led to the liquidation of nearly $1 billion in leveraged positions, predominantly from long trades, according to CoinGlass.
Analysts Expect a Rebound but Caution on Consolidation
Despite the downturn, analysts are optimistic about a short-term recovery for bitcoin. Having returned to the lower boundary of its trading range since late November, BTC could see a technical bounce before resuming its longer-term trend.
“Bitcoin’s current pullback might be a healthy reset,” said Bob Loukas, founder of Station3 NYC. “We may see consolidation around these levels before the market gains enough momentum to sustain $100K and beyond.”
Hedge fund QCP Capital also pointed to potential catalysts ahead, including Friday’s U.S. jobs report and Trump’s upcoming inauguration on January 20.
“With expectations building around the new administration, we see this pullback as an opportunity for accumulation,” QCP analysts noted in a Telegram update. “The market is likely positioning itself for a renewed rally in the lead-up to inauguration day.”
