The crypto market has witnessed gloomy trading this week with a slump of around 3% today, while Bitcoin and top altcoins witnessed a significant retreat. This recent slump indicates that the investors are staying on the sideline due to the absence of any significant catalyst that could boost their sentiments. However, despite that, many experts said that these pullbacks are very likely during the bull run of the assets. Why Is the Crypto Market Falling Today? Despite the recent crypto market retreat, a flurry of experts deem it as a buying opportunity. It also reflects the long-term confidence of the traders towards the sector, especially with the shifting focus of the global investors towards the digital assets space. So, let’s explore the potential reasons behind the recent dip and see how soon can the market witness a recovery. US Fed’s FOMC Minutes Fuels Concern The latest US Fed’s FOMC minutes from the December meeting appear to have weighed on the financial market sentiment, let alone the crypto space. Notably, the latest FOMC indicated that the US Federal Reserve would be moving more slowly on interest rate cuts through this year due to uncertainty surrounding President Donald Trump’s policies. The FOMC minutes revealed concerns about inflation and the potential impact of Trump’s policies on the US economy. Although the minutes have no mention of Trump, it signaled that the central bank would move cautiously with their rate cut plans ahead. As a result, the Fed reduced its outlook for expected cuts in 2025 to two from four, assuming quarter-point increments. This cautious approach has sparked concerns among investors, further adding to the recent market crash . Notably, the market also witnessed a selloff last month, when Fed Chair Jerome Powell also hinted towards a similar move. Robust US Jobs Data The recent US Jobs data by the Labor Department showed that the job market remained strong, cementing bets towards a potential hawkish move by the Fed ahead. The JOLTS job openings came in at 8.1 million through the last day of November 2024. A strong labor market would provide more space for the US central bank to move with tightened monetary policy plans ahead. Besides, the ISM Services PMI also showed that the US economy remained strong, indicating that the economy remained resilient despite the high interest rates set by the central bank. This move has also dampened the sentiment of the global financial market sentiment, potentially contributing to the recent dip in the crypto market. US Govt’s BTC Dump In Focus Apart from the macroeconomic woes, the recent BTC dump by the US government has further intensified the selling pressure in the market. For context, the US govt has recently dumped 69,370 BTC worth $6.7 billion from the Silk Road marketplace, which has weighed on the traders’ sentiment. The timing of the event is also important. The DOJ gave the green light for this move just ahead of Donald Trump is about to be sworn in as the President. Besides, the Trump administration also pledged to move towards a Bitcoin Strategic Reserve plan, which has fueled a massive rally in the market previously. Having said that, this recent move appears to have further dampened the investors’ sentiment today. However, experts like CryptoQuant CEO Ki Young Ju refuted claims over the massive impact of the US Govt dump on the BTC price. In a recent X post, he highlighted last year’s $379 billion entering the market, which is around $1 billion per day. Having said that, he urged investors not to panic as the $6.5 billion dump “could be absorbed in just a week.” A recent CoinGape report also discussed that why Bitcoin price slipped recently after hitting the brief $102K level. Crypto Market Slips The global crypto market fell 2.67% during writing to $3.28 trillion, with the overall trading volume falling 12% to $162.27 billion. Besides, BTC price fell more than 2.3% and slipped below the $94K level, while Ethereum price was down 1.2% to $3,318. Other altcoins like Solana, Dogecoin, and Cardano also fell between 3% and 7%, reflecting the heavy selling pressure in the market. Simultaneously, the broader crypto market faces liquidation of around $483.73 million in the last 24 hours. Crypto Market Recovery Soon? The recent crypto market performance has forced many investors to stay on the sidelines. However, despite that, experts like Rich Dad Poor Dad author Robert Kiyosaki remained bullish on the long-term trajectory of the market, especially Bitcoin. The author said that the recent dip would provide a buying opportunity to investors at a lower price, indicating his optimistic outlook on crypto. Echoing a similar sentiment, El Salvador President Nayib Bukele also hinted towards BTC accumulation during this retreat. Having said that, it appears that the market will soon make a strong recovery with Bitcoin leading. Notably, Bitcoin has strong dominance over the broader digital assets and the top altcoins usually follow BTC’s path. Considering that, a Bitcoin recovery might bolster the broader market sentiment. Besides, the upcoming Donald Trump inauguration could also act as a major catalyst to boost investors’ confidence. Trump has actively voiced his support for the digital assets space. Besides, he also pledged to make the US the crypto capital, while hinting towards creating a BTC Strategic Reserve in the US. Considering that, the market may witness a strong recovery with Trump’s inauguration in focus. The post Crypto Market Falls By 3%, How Soon Will It Recover? appeared first on CoinGape .
