Cryptocurrency experts name the main reason for the fall of the digital asset market

Today, January 8, the price of bitcoin BTC $103,293.48 Bitcoin 1.32% Market capitalization $2.05 trillion VOL. 24 hours $3.82 billion fell by 6.28% to $ 95,460, after surpassing the $ 100,000 mark earlier this week. Ethereum ETH $3,280.99 Bridged Ether (StarkGate) -4.04% Market capitalization $0.3 billion VOL. 24 hours $2.02 billion suffered even bigger losses, falling by 9.5% over the past 24 hours to $ 3,333. Other major cryptocurrencies, such as Dogecoin DOGE $0.16 Department Of Government Efficiency -3.03% Market capitalization $0.16 billion VOL. 24 hours $1.41 billion and Avalanche AVAX $39.11 Binance-Peg Avalanche -5.69% Market capitalization $78.41 million VOL. 24 hours $90.01 million , are also down more than 10%. The GMCI 30 index, which tracks the 30 largest cryptocurrencies, was down 7.48%.

Earlier this week, the growth of bitcoin and ethereum was attributed to market optimism due to preparations for the inauguration of Donald Trump. This was accompanied by an increase in funding for perpetual futures. However, according to Presto Research analyst Ming Jun, the general markets, including stock markets, weakened due to macroeconomic concerns about prolonged inflation.

«Not only cryptocurrencies, but also the NASDAQ and S&P 500 fell by more than 1% due to ISM data that showed faster-than-expected growth in the US economy. This increased fears of persistent inflation and pushed bond yields higher, with the 10-year Treasury yield reaching its highest level since April,» explains June.

Rachel Lucas, an analyst at BTC Markets, adds that recent economic data has led traders to expect the US Federal Reserve to continue to maintain high interest rates for a long time. Fed Chairman Jerome Powell’s statements in December about tightening monetary policy only increased market volatility.

Expectations of political changes after the inauguration of Donald Trump on January 20 also affect the market. With a pro-cryptocurrency majority in Congress and key appointments such as Scott Bessent as Treasury Secretary and Elon Musk as an advisor, the new administration could significantly change the approach to the cryptocurrency market.

Investors are also looking ahead to a number of important economic events, including the release of the Fed’s meeting minutes, this week’s nonfarm payrolls, and the January 15th Consumer Price Index (CPI) data, which will help assess risks related to monetary policy and inflation.