(Kitco News) – Cryptocurrency prices sold off on Monday morning following a weekend of bullish moves higher for the altcoin sector, while Bitcoin (BTC) largely consolidated near support at $98,000 but failed to break $100,000.
Data provided by TradingView shows that BTC experienced a sharp downturn after the opening of the U.S. markets, plunging to a low of $54,564 before bouncing back above $96,000 as the sell-off many analysts have warned about finally materialized following BTC’s nearly 50% surge since early November.
BTC/USD Chart by TradingView
Gold experienced a similar downturn, falling from a high of $2,720/oz on Sunday to a low of $2,627/oz in trading on Monday morning.
While the safe haven plays struggled, stocks climbed higher after traders became emboldened by President-elect Donald Trump's choice of Scott Bessent for Treasury secretary. In the wake of his nomination, the benchmark 10-year Treasury yield dipped back to 4.29% as it helped calm some of the growing fears around Trump’s inflationary agenda.
“US stock index futures stormed higher in early trade this morning. Sentiment got a lift on news that President-elect Trump has picked Scott Bessent as his incoming Treasury Secretary,” said David Morrison, Senior Market Analyst at Trade Nation. “There’s relief that Mr Bessent is a known quantity with a strong track record as a successful hedge fund manager, as well as a fiscal hawk.”
“This ties into the prevailing view that the Trump administration will focus on boosting economic growth while actively taking measures to cut costs, thereby reducing the fiscal deficit, which should reduce the rate of growth in the national debt,” he added. “Mr Bessent is also in favor of tariffs, although he prefers a gradualist approach which suggests there’s room for negotiation. Yields on Treasuries fell on the news with the 10-year note dropping around 7 basis points to [4.29%].”
Markets are keenly awaiting Wednesday's release of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, hoping to avoid any unexpected surge that could further erode the chances of a 25 basis point interest rate cut in December.
“US inflation has been creeping higher recently, leading Fed Chair Jerome Powell to say that there’s no hurry to lower rates,” Morrison noted. “Tomorrow sees the release of minutes from the Fed’s last monetary policy meeting.”
The CME FedWatch tool currently puts the odds of a 25 bps rate cut next month at 52%, down from 59% last week and 75% a month ago.
While falling bond yields and the decreased chances of a rate cut in November have aided bears in their efforts to tamp down Bitcoin, analysts agree that a correction was due, but over the long term, the trend remains higher.
“We expect both the bull run and volatility in BTC to continue for the rest of the year,” said Ed Hindi, Chief Investment Officer at Tyr Capital. “A range of USD 75k/120k would not be surprising. Corrections will probably be swift as dip buying and profit-taking are in full force, driven by incredible levels of FOMO.”
“The Trump Trade has lifted Bitcoin and equities to record highs,” he added. “We believe the early Santa Claus rally is over-extended and foresee profit taking into year-end.”
Looking ahead to 2025, Hindi said Tyr Capital sees Bitcoin hitting a high of $250,000.
“US institutional investors will deepen their exposure to crypto assets, and the rest of the world will play catch up,” he said. “Trump’s win is a massive regulatory green light that will broaden both participation and position sizes in BTC, ETH and blue chip defi altcoins.”
Regarding altcoins, Hindi noted that “BTC rallies are almost always followed with a spike in altcoin activity, and with profit taking in BTC likely to hit all-time highs after all-time highs, altcoin season will be in full swing before the year is over. We expect Ethereum (ETH), one of crypto’s most misunderstood networks, to win big. More generally – we expect altcoins to outperform BTC in the short to medium term.”
And looking at the meme coin sector of the altcoin market, he highlighted that “Meme coins thrive in the attention economy.”
“VC tokens haven't captured value and are facing an identity crisis,” Hindi said. “Meme coins offer an alternative for retail, driven by fairer distribution, lower valuations, community, and financial nihilism. Meme coins channel the internet’s dopamine-driven dynamics, proving that in today’s markets, narrative, virality, and culture can outweigh utility.”
At the time of writing, Bitcoin trades at $96,291 for a decrease of 0.15% on the 24-hour chart.
