Étienne Girard
Cardano’s ADA suffered the steepest losses among major cryptocurrencies on Thursday as Bitcoin’s persistent downward trend dashed hopes for an altcoin rally.
BTC fell to nearly $93,000 on Wednesday following the release of robust U.S. economic data. The Institute for Supply Management (ISM) reported stronger-than-expected performance in the U.S. services sector, with its prices-paid index reaching its highest level since early 2023. This sent U.S. Treasury yields soaring, triggering a decline in equities and risk assets like BTC.
Altcoins followed Bitcoin’s descent, with ADA, Solana’s SOL, BNB Chain (BNB), and Ethereum’s ETH losing nearly 10% since the start of the week. The broader CD20 index, which tracks the performance of the largest cryptocurrencies, dropped 2.87% in the past 24 hours, compounding a 7% loss from the previous day.
Investor caution is growing ahead of President-elect Donald Trump’s inauguration on January 20. According to PRIME analyst Daniel Walker, the event could trigger a “sell-the-news” reaction. While risk assets, including cryptocurrencies, have rallied in recent months on expectations of pro-business policies under Trump’s administration, traders are now taking profits, potentially capping further gains.
Options on the S&P 500 are signaling increased downside risk compared to a year ago, further discouraging risk-taking in markets. Bonds and other safer investments have become more attractive, potentially delaying any significant recovery in Bitcoin and altcoins.
Learn: What is Cryptocurrency?
Trump Inauguration Could Shape Crypto’s Future
Trump’s upcoming inauguration is expected to bring significant changes to U.S. crypto regulations. Speculation around a potential strategic Bitcoin reserve and other supportive measures for the industry could provide the foundation for the next crypto rally.
Singapore-based QCP Capital highlighted the importance of upcoming U.S. economic data, advising traders to monitor Friday’s Federal Open Market Committee (FOMC) and Non-Farm Payrolls (NFP) reports closely.
“All eyes are on this week’s economic releases, which are likely to shape Bitcoin’s price movements,” QCP stated in a Thursday market update. “We believe the current pullback is temporary and sets the stage for a bullish rally as optimism builds around Trump’s crypto-friendly policies.”
Key Economic Indicators to Watch
The NFP report, a key measure of job creation in the U.S., is critical for assessing the economy’s health. Strong numbers could signal potential interest rate hikes, which historically weigh on risk assets like Bitcoin. Conversely, weak NFP figures could keep rates low or trigger cuts, creating favorable conditions for a crypto rebound.
With market participants closely tracking these developments, the interplay between macroeconomic data and regulatory shifts under Trump’s administration is likely to define the trajectory of cryptocurrencies in the months ahead.
