Cryptocurrency prices fell this week as Federal Reserve meeting minutes revealed a hawkish outlook due to rising inflation fears.

Bitcoin (BitcoinThe broader cryptocurrency market collapsed on January 9, continuing the contraction for several days with the total digital asset sector falling 4% to $3.37 trillion in 24 hours.

Researcher at QCP Capital books On Telegram, macro headwinds weighed on cryptocurrency prices after Fed meeting minutes were shared late Wednesday, January 8. Fed Governor Christopher J. Waller said the central bank would make any further interest rate cuts to limit rising inflation risks.

The Federal Reserve has indicated that it will slow the pace of interest rate cuts due to rising inflation risks. Yesterday's ADP Employment Survey also added to the overall uncertainty, showing a slowdown in private sector hiring and wage increases. This is in sharp contrast to Tuesday's JOLTS job vacancy results, which charted a stronger job market.

QCP Capital on the cryptocurrency decline

After rising to $95,200, Bitcoin fell below the key support level of $92,500. QCP noted that BTC could consolidate between $92,000 and $95,000 until the next rally. It could also reach the $90,000 level if $92,000 is breached, the trading desk said.

Bitcoin may also face selling pressure from the US government, as the Department of Justice has reportedly approved the sale of $6.5 billion worth of seized Bitcoin Silk Road. The Justice Department's decision came shortly before the inauguration of President Donald Trump. Some cryptocurrency advocates speculated on the timing of the Justice Department's announcement due to Trump's promises to halt all government bitcoin sales and It consolidates National reserve.

However, the impact of such a sell-off may be short-lived due to demand from giant institutions like MicroStrategy and BTC exchange-traded funds on Wall Street. Trillion dollar wealth manager Fidelity too expected More countries, companies and governments will buy Bitcoin in 2025, which could boost market prices.