Dogecoin Jumps 11%, Bitcoin and XRP Rebound After 2025 Rate Hike Fears Trigger Monday Sell-Off

The cryptocurrency market experienced a rollercoaster ride this week, with a significant sell-off on Monday followed by a robust rebound on Tuesday. Fears of high interest rates in 2025 and the Federal Reserve's final meeting of the year triggered the initial sell-off, but investors quickly regained their confidence, driving prices back up. Let's delve into the factors contributing to this market volatility and the subsequent rebound.



Monday's Sell-Off: Fears and Reality

The sell-off on Monday was primarily driven by two factors: fears of high interest rates in 2025 and the Federal Reserve's final meeting of the year. During the meeting, the Fed cut interest rates by 25 basis points, which was expected, but Fed Chair Jerome Powell's hawkish rhetoric caught investors off guard. Powell stated that the Fed would be cautious about further cuts, leading to a sell-off in crypto markets. Bitcoin (BTC) fell as much as 10%, while XRP and Shiba Inu (SHIB) also experienced significant losses.



Tuesday's Rebound: Optimism and Growth

The market rebounded on Tuesday as investors digested the news and realized that the Fed's stance was not as dovish as initially feared. Growing optimism over potential XRP ETF approvals and connections between Ripple and the incoming administration contributed to the rebound in XRP prices. As of Tuesday, XRP was priced at $2.66, the highest mark seen so far in 2025, and not far from the seven-year high price of $2.82 hit in December 2024.

Dogecoin (DOGE) also experienced a significant rebound, surging by nearly 11% to reclaim all of its lost ground and surge higher. At a current price of $0.357, DOGE is sitting at a nearly seven-day high, almost matching the price point from this time last Tuesday. However, despite the recent gains, DOGE remains down 12% over the last 30 days.



The Role of Regulatory Developments and Government Policies

The re-election of President Donald Trump in 2024 had a significant impact on the crypto market's trajectory, particularly for Bitcoin and XRP. Trump's re-election was seen as a positive development for the crypto market, as he had previously expressed support for Bitcoin and cryptocurrencies. This sentiment was reflected in the market, with Bitcoin and XRP prices surging following the election results.

The approval of U.S. spot Bitcoin and Ethereum ETFs by the SEC in 2024 also played a crucial role in boosting investor trust and market acceptance. This move provided a regulated and accessible investment vehicle for institutional investors, leading to substantial inflows into the crypto market. The Bitcoin ETPs collectively took in more than $36bn in net inflows in 2024, making them the best ETP launch as a cohort in history.



In conclusion, the cryptocurrency market experienced a volatile week, with a significant sell-off on Monday followed by a robust rebound on Tuesday. Fears of high interest rates in 2025 and the Federal Reserve's final meeting of the year triggered the initial sell-off, but investors quickly regained their confidence, driving prices back up. The re-election of President Donald Trump and the approval of U.S. spot Bitcoin and Ethereum ETFs also contributed to the market's trajectory. As the crypto market continues to evolve, investors should stay informed about regulatory changes, technological advancements, and market dynamics to capitalize on opportunities and mitigate risks.