Cryptocurrencies Continue Sharp Decline
The cryptocurrency market has experienced significant volatility in recent days, with Bitcoin leading a widespread downturn. After reaching an all-time high of $108,000, Bitcoin plunged below $100,000 on Thursday and further dropped under $93,000 by Friday evening. Major altcoins including Ethereum, BNB, Solana, Dogecoin, and Cardano followed this downward trend.
Liquidation Wave Hits Traders
The market correction triggered massive liquidations across crypto exchanges:
- 42.8 million accounts liquidated in past 24 hours
- $1.4 billion in total liquidation value
- 80%+ were long positions
👉 Why are crypto liquidations happening now?
Key Factors Behind the Crash
- Profit-Taking Activity
Analysts note substantial profit realization after Bitcoin's 50% rally since November. Federal Reserve Policy Shifts
- Reduced expectations for 2025 rate cuts (only two 25-basis-point cuts projected)
- Chair Powell's hawkish comments on inflation control
- Explicit rejection of Bitcoin holdings in Fed reserves
- Market Sentiment Shift
"This appears to be typical year-end position unwinding," noted Edward Chin of Parataxis Capital.
Sector-Wide Impact
Public Market Reactions
- Hong Kong listed crypto stocks: OSL Group, Blue Hat Interactive down 5+%
- U.S. pre-market trading:
Bit Digital (-7%), MicroStrategy (-5%), Coinbase (-4%)
Technical Analysis Outlook
- Bitcoin may test $90,000 support level (Zann Kwan, Revo Digital)
- Current trading range: $94,000 ± $1,000 with 8% daily decline
Altcoins show steeper drops:
Coin 24h Change Ethereum -12% Dogecoin -20% Cardano -14%
Institutional Perspectives
"Global economic indicators like interest rates directly impact crypto volatility," explained Jake Werrett, General Counsel at dYdX. "Reduced rate cut expectations remove a key investment thesis for Bitcoin as an inflation hedge."
👉 How to hedge against crypto volatility
FAQ: Understanding the Market Move
Q: Is this a normal correction or the start of a bear market?
A: Analysts view this as a healthy pullback within a bull market, with Bitcoin still up 50% since November.
Q: How does Fed policy affect cryptocurrency prices?
A: Tighter monetary policy reduces risk appetite across assets. Bitcoin's correlation with traditional markets has increased since 2022.
Q: Should investors be worried about long-term prospects?
A: The fundamental adoption narrative remains intact, though short-term technicals suggest caution.
Q: What's the significance of Powell's Bitcoin comments?
A: The Fed's stance creates institutional adoption headwinds, but doesn't affect Bitcoin's core blockchain functionality.
Q: Are altcoins riskier than Bitcoin during downturns?
A: Historically yes - the "altcoin season" typically follows Bitcoin's lead, with amplified volatility.
Q: When might the market stabilize?
A: Traders watch for consolidation above $90,000 support and reduced liquidation volumes.
Strategic Considerations for Investors
- Monitor Fed policy signals and macroeconomic data
- Rebalance portfolios to account for higher correlation periods
- Consider dollar-cost averaging during volatility
- Maintain strict risk management with stop-loss orders
The crypto market remains highly sensitive to macro conditions as institutional participation grows. While short-term turbulence persists, the sector's long-term transformation of global finance continues unfolding.