Bitwise CIO: This BTC pullback is just a short-term fluctuation and has not changed the long-term bullish trend of the crypto market

On December 19, Bitwise Chief Investment Officer Matt Hougan analyzed that the Federal Reserve's announcement of a 25 basis point rate cut and reducing next year's expected cuts from four to two triggered a significant pullback in risk assets. The S&P 500 fell by 3%, the Russell 2000 small-cap index dropped by 4.4%, and Bitcoin prices fell from about $106,000 to below $99,000 before slightly rebounding. At the same time, approximately $600 million in leveraged long positions in the crypto market were liquidated, exacerbating market volatility.

Matt Hougan believes this pullback is only temporary volatility and does not change the long-term bullish trend of the crypto market. He pointed out that while the influence of the Federal Reserve on the crypto market has weakened, internal driving forces within cryptocurrency are stronger including Washington policy shifting towards supporting cryptocurrencies, increased institutional investment and ETF inflows into cryptocurrencies, government and corporate purchases of Bitcoin as well as major breakthroughs in blockchain technology.

In addition to this he mentioned that Bitcoin’s ten-day moving average (around $102k) remains higher than its twenty-day moving average (around $99k), indicating an ongoing positive trend for bitcoin. Overall he believes that despite short term interest rate adjustments; they will not alter this multi-year bull run for cryptocurrency markets.