The crypto market witnessed a volatile session this week as Bitcoin (BTC) climbed to $102,500 early Thursday before retreating below the $100,000 mark. While Bitcoin struggled to maintain its upward momentum, altcoins like Avalanche (AVAX) and Chainlink (LINK) outshone the market with significant gains.
Here’s a detailed breakdown of the market activity.
Bitcoin’s Rollercoaster Rally
Bitcoin appeared poised to reach a new all-time high after President-elect Donald Trump reaffirmed his commitment to embracing digital assets. Speaking at the New York Stock Exchange, Trump declared his intent to “do something great with crypto,” including establishing a Strategic Bitcoin Reserve for the U.S. His remarks sent BTC soaring to $102,500, its highest level since last week’s record above $104,000.
However, the rally fizzled as risk assets, including Bitcoin, faced selling pressure. Western bond markets reacted negatively to dovish signals from the European Central Bank (ECB), which cut its benchmark interest rates by 25 basis points and hinted at further cuts. By late Thursday afternoon, Bitcoin had dropped to $99,800, failing to hold the key $100,000 support level.
Altcoins Outperform Bitcoin
Altcoins demonstrated resilience, with most members of the CoinDesk 20 Index recording gains. Leading the pack were Avalanche (AVAX) and Chainlink (LINK), which surged by 9% and 13%, respectively.
- AVAX benefited from news of a $250 million token investment led by Galaxy, Dragonfly, and ParaFi Capital.
- LINK saw strong demand, fueled by World Liberty Financial (WLFI), a decentralized finance project affiliated with Trump. WLFI purchased $1 million worth of LINK tokens in the later hours of the session, according to Arkham Intelligence.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, also performed well, posting a 1.5% daily gain. Analysts at CryptoQuant cited strong spot ETF inflows and growing Ethereum blockchain activity as key drivers, suggesting ETH could soon surpass its all-time high of $5,000.
Broader Market Trends
The market sell-off extended beyond Bitcoin:
- Bond Yields Surge: The German 10-year Bund yield rose 8 basis points to 2.21%, while the U.S. 10-year Treasury yield climbed to 4.34%.
- Gold Declines: Gold prices dropped 1.8% to $2,706 per ounce, highlighting broader risk aversion.
- U.S. Stocks Fall: The Nasdaq lost 0.7%, and the S&P 500 slipped 0.5%, further reflecting the market’s cautious sentiment.
Despite Bitcoin’s retreat, the market’s broader narrative remains optimistic, with altcoins capturing the spotlight and institutional investments fueling sectoral growth.
Conclusion
Bitcoin’s struggle to hold $100,000 amid bond market volatility underscores the interplay between macroeconomic factors and crypto market dynamics. Meanwhile, the strong performance of altcoins like AVAX and LINK reflects the sector’s resilience and the growing appeal of decentralized finance.
As the crypto market evolves, investors will continue to monitor policy developments, technological advancements, and institutional trends shaping this dynamic space.
