Bitcoin recovered slightly on Monday after hovering near a one-month low, which built on last week’s steep decline as investors stayed on edge ahead of the Federal Reserve’s policy meeting and following a wave of liquidations across leveraged crypto markets.
The world’s largest cryptocurrency was last up 2.06 percent at $88,350 after falling to $88,081 earlier in the session.
Bitcoin fell more than 6 percent over the past week amid a broader risk-off shift across financial markets, as mounting uncertainty over global monetary policy, heightened foreign exchange volatility, and sharp moves in U.S. Treasury yields weighed on sentiment.
Bitcoin set for fourth consecutive monthly decline
The latest selloff was driven by persistent risk-off sentiment following a turbulent week marked by comments by U.S. President Donald Trump in Davos, touching on Greenland, tariffs and broader geopolitical conflicts.
This shift in sentiment pushed gold and silver to record highs, undercutting bitcoin’s safe-haven narrative and reinforcing its status as a risk asset that largely moves in step with U.S. equities.
Bitcoin is currently heading toward a fourth straight monthly loss, a run last seen between 2018 and 2019, when the market endured six consecutive months of declines. While a full trading week remains in January, bitcoin is marginally lower for the month, trading around $88,000.
The cryptocurrency notched negative monthly closes in October, November and December, representing a steep pullback from its October all-time high. From its record peak, bitcoin has fallen by roughly 36 percent.
Read: Bitcoin price slips to $89,173, set for over 6 percent weekly loss
Liquidations deepen market losses
Last week’s selloff was also intensified by forced liquidations in derivatives markets, as highly leveraged positions were rapidly unwound.
Market data shows that more than $1 billion in leveraged crypto positions were wiped out during the recent turbulence, with long bitcoin bets bearing the brunt of the losses. These liquidations typically magnify price drops, as automatic position closures add further downward pressure.
Focus has now shifted squarely to the Federal Reserve’s two-day policy meeting, which wraps up on Wednesday. While markets largely anticipate no change to interest rates, investors will be watching Chair Jerome Powell’s comments closely for signals on the timing and pace of potential rate cuts later this year. Attention is also centred on guidance around liquidity conditions and the Fed’s balance sheet, both widely viewed as critical drivers of crypto market dynamics.
Adding to the uncertainty, traders are awaiting an expected announcement from U.S. President Donald Trump on his nominee to lead the Federal Reserve. The choice is seen as potentially shaping the future direction of monetary policy, especially if the appointee is viewed as more dovish or closely aligned with the administration’s economic agenda.
Most altcoins stayed under pressure on Monday, extending recent losses as cautious sentiment prevailed across the market.
Ethereum, the world’s second-largest cryptocurrency, slipped 0.4 percent to $2,916.08, while third-ranked XRP bucked the trend, rising 1.5 percent to $1.91. Solana fell 1.96 percent to $123.11, while Cardano and Polygon were little changed.
Among meme tokens, Dogecoin edged down 0.32 percent, while $TRUMP fell 1 percent.
