By Frank Martin (MoneyAmped.com)
Bitcoin, the largest crypto asset by market cap, crossed above $96,000 on Tuesday morning after facing massive selling pressure at the start of the week. Data from CoinGecko shows BTC has hit $96,378 at press time, following a 24-hour growth of 5.3%.
The sudden rally follows reports that incoming US President Donald Trump will sign a pro-crypto executive order immediately after assuming office on Monday. According to various sources, the order could lead to the formation of a crypto council that would consist of over 20 industry gurus and may abolish SEC rules that prohibit traditional banks from owning cryptocurrencies.
Investors Withdraw $569M From Bitcoin ETFs
The latest developments come after Bitcoin spot Exchange-Traded Funds (ETFs) witnessed significant outflows last week. On Monday, Farside Investors analysts reported that investors withdrew over $560 million from the ETFs between January 6th and 10th.
It is worth pointing out that before rallying above $96,000 earlier today, Bitcoin plummeted below $90,000 on Monday, a level it hadn’t touched since mid-November when it experienced a surge following Trump’s win against his close opponent Kamala Harris.
Some analysts claim yesterday’s dip was fueled by growing speculations that the Federal Reserve could refrain from cutting rates this year due to improved employment data. Notably, investment bank Goldman Sachs has predicted reduced rate cuts in 2025.
Meanwhile, Head of Institutional Research at Coinbase, David Duong, says the Federal Reserve’s failure to slash interest rates this year could put cryptocurrencies under intense selling pressure.
Why Rate Cuts Matter in Crypto
Typically, when the US Central Bank lowers interest rates, cryptocurrencies tend to rally as investors enter the market due to easy access to investment funds from banks. On the other hand, rate hikes make borrowing expensive, thus limiting investors’ ability to inject funds into the crypto markets. As such, digital assets usually witness price drops.
That said, Bitcoin has posted a 5.6% loss this month despite the latest rally. Furthermore, it is down about 10.6% from its all-time high of $108,207.
Most of the leading currencies have mirrored BTC performance in the past 24 hours. Ethereum and XRP have surged 5.6% to $3,201 and $2.57, respectively. BNB is up 3.1% to $695, while Solana is trading at $188.83 after rallying 7.2%.
