Crypto Giants Take a Backseat: What's Shaking Up Bitcoin and Ethereum?
Crypto Market Struggles Amid Economic Shifts
Bitcoin and Ethereum Lag Behind
Bitcoin and Ethereum are underperforming, not just against stocks but also against smaller cryptocurrencies. This unusual trend suggests the market is reacting to broader economic news rather than internal crypto dynamics.
Interest Rates Drive Crypto Sell-Off
New research reveals that the recent crypto price drop was not due to internal market issues but rather shifts in interest rate expectations. When U.S. Federal Reserve Chair Jerome Powell adjusted his tone, the likelihood of a December rate cut plummeted, triggering a sell-off in risky assets—including highly leveraged crypto.
Widespread Losses Across Sectors
Nearly all crypto sectors experienced declines:
- Overall market index: -12%
- AI, DePIN, Gaming, Meme coins: -14% to -18%
The market remains fragile and unlikely to recover until Bitcoin regains its recent highs.
Crypto Prices Tied to Monetary Policy
Currently, crypto prices are influenced more by interest rate expectations than by crypto-specific events. The next major market move will likely depend on changes in interest rates rather than internal crypto developments.
Bitcoin Dips Below $100,000
Bitcoin recently fell below $100,000 for the first time since May, driven by broader economic factors rather than crypto-specific issues. Despite this, the economic environment remains supportive:
- Japan: Launching a major stimulus package
- China: Easing monetary policy
- U.S.: Ending quantitative tightening
- Potential U.S. stimulus checks could aid market recovery.
