As traders continued to concentrate on prospects of a U.S. Federal Reserve rate decrease and anticipated important inflation data, Bitcoin saw a decline on Friday but retained the majority of its gains following a strong midweek comeback.
By 09:02 ET (14:02 GMT), the biggest cryptocurrency in the world has dropped 1.4% to $90,639.
Earlier this week, a wave of risk-off sentiment sparked significant leveraged liquidations across cryptocurrency markets, causing Bitcoin to momentarily drop around $84,000, its lowest level in over a month.
Nevertheless, a strong midweek comeback placed Bitcoin on course for a little weekly increase.
Fed cut bets are still strong; the PCE data is due soon
Growing confidence that the Federal Reserve might lower rates next week contributed to the subsequent rebound.
The U.S. unemployment claims statistics released on Thursday revealed a dramatic decline in weekly filings to their lowest level in over three years, supporting the idea that the labor market is cooling and that the Fed may be able to start relaxing policy.
Risk assets, like cryptocurrencies, usually gain from the possibility of reduced borrowing rates.
Ahead of Friday’s U.S. Personal Consumption Expenditures (PCE) inflation data, which is the Fed’s favorite price indicator, trade remained cautious. A lower reading may make the argument for a rate reduction stronger.
According to reports, institutional inflows have decreased in comparison to previous quarters, making Bitcoin more susceptible to abrupt price fluctuations caused by changes in attitude and derivatives activity.
BofA will give wealthy customers access to cryptocurrency
In a significant move for one of Wall Street’s biggest banks, Bank of America (NYSE:BAC) said on Thursday that it would start allowing its financial advisors to suggest cryptocurrency allocations to customer portfolios in January 2026.
Advisors at Bank of America Private Bank, Merrill, and Merrill Edge will be permitted to propose regulated cryptocurrency exchange-traded products (ETPs) with a suggested allocation of 1% to 4% of a client’s portfolio under the new policy.
While highlighting the dangers and volatility of cryptocurrencies, the bank said that the shift reflects increased customer interest in digital assets and certain investors’ desire for exposure to “thematic innovation.”
In order to complement the new recommendation structure, Bank of America strategists will start covering four prominent Bitcoin ETFs on January 5. These include products from Bitwise, Fidelity, Grayscale, and BlackRock.
According to BCA, Bitcoin’s decline paves the door for a return to macro drivers.
According to BCA Research, the steep decline in Bitcoin is a “capitulation of excess speculation rather than a change in fundamentals,” driven by micro triggers, record liquidations, and plummeting sentiment.
The macroeconomic research agency observes that the Fear and Greed Index has returned to 2022-type extremes, supply-in-profit has dropped to levels corresponding with previous lows, and Treasury-company premiums have switched to discounts.
With leverage mostly flushed, BCA contends that the asset is now in a position to “re-anchor to macro drivers as institutional demand continues to build,” bolstered by continuous ETF inflows, the opening of new platforms for cryptocurrency exposure, and Bitcoin’s function as “global wealth’s insurance asset” in a setting where demand for alternative reserves is growing.
Today’s cryptocurrency price: XRP drops 3%, altcoins decline
Following Bitcoin’s movements amid a cautious attitude, the majority of altcoins saw a little decline on Friday.
Ethereum, the second-most popular cryptocurrency, dropped 2.1% to $3,102.14.
XRP, the third-ranked cryptocurrency in the world, dropped over 3% to $2.06.
Cardano fell 4%, Polygon withdrew around 3%, and Solana declined 4.4%.
Dogecoin and $TRUMP, two meme tokens, saw declines of around 4% and 2.8%, respectively.
