Bitcoin Slides to $100K, Crypto Stocks Eviscerated as Liquidity Crunch Hammers Risk Markets
Bitcoin's price fell below $101,000, down over 1% in 24 hours, as the broader crypto and equity markets saw significant losses during U.S. trading hours. This decline aligns with weakened market sentiment amid cooling expectations for a Federal Reserve rate cut in December. Crypto-related equities, especially mining firms like Bitdeer and Bitfarms, suffered steep drops of up to 19%. Analysts suggest Bitcoin may not surpass its recent highs in 2025, with limited movement expected through the end of the year due to macroeconomic factors.
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Sharp Decline in Bitcoin and Crypto Markets During U.S. Trading Hours
Bitcoin (BTC) and the broader crypto market experienced a notable decline, continuing the recent pattern of losses, especially during U.S. market hours. Following an overnight rebound to as high as $104,000, BTC reversed course early during U.S. trading hours, hovering slightly above $100,000 around noon on the east coast. As of now, BTC is down more than 1% over the past 24 hours.
Broader Market Weakness Amid Fed Rate Expectations
The retreat in the crypto market aligns with a steep decline in risk assets, as investors come to terms with the Federal Reserve's current stance on interest rates, which does not currently suggest a rate cut in December. Major U.S. indices have also taken a hit, with the Nasdaq down 2% and the S&P 500 losing 1.3% on the same day.
Crypto-linked Equities See Steep Losses
Crypto-related equities bore the brunt of the market downturn, specifically those with significant AI infrastructure and data center exposure. Major losses included:
- Bitdeer (BTDR) down 19%
- Bitfarms (BITF) dropped 13%
- Cipher Mining (CIFR) and IREN each lost over 10%
Other notable declines in the sector included:
- Galaxy (GLXY)
- Bullish (BLSH)
- Gemini (GEMI)
- Robinhood (HOOD), all falling by 7%-8%.
BTC's Weakness Reflects Recent Market Trends
This pullback underscores a persistent weakness in crypto markets during U.S. trading hours. This trend aligns closely with diminished expectations for an interest rate cut in December by the Federal Reserve. Paul Howard, senior director at trading firm Wincent, remarked: "Crypto is closely linked to macro-economics now more than anytime in the past."
Market Sentiment and BTC's 2025 Outlook
Markets currently price in 50/50 odds for a 25 basis point rate cut next month. Paul Howard predicts that BTC will likely remain "muted" around current levels for the rest of the year. He added, "My sense is with just six weeks left, we’ve seen the all-time highs for 2025." Going forward, he expects steady ascension over the coming year, although with acknowledged volatility.