The cryptocurrency market is concluding the week with a downturn as Bitcoin trades at approximately $99,984, facing challenges in maintaining the critical psychological threshold of $100,000. This decline marks an 18% drop for Bitcoin over the last 30 days, signaling the end of a previously robust bullish trend.
A significant factor contributing to this decline is the recent communication from the US Federal Reserve, which suggested a slowdown in potential interest rate cuts. This development led to a strengthening of the US dollar, prompting investors to retreat from riskier assets, with cryptocurrencies often being the most affected.
Ethereum is also experiencing downward pressure, currently trading near $3,217. Market indices, such as the CoinDesk 5 Index and the CoinDesk 20 Index, reflect a similar pattern, both declining by around 3% in the past 24 hours. Overall market sentiment remains cautious, with traders opting for more conservative strategies.
Futures Market Activity Indicates Risk Reduction
In the derivatives market, there is a clear trend of traders reducing their exposure and lowering leverage. The total open interest in Bitcoin futures has decreased to approximately $24.9 billion, indicating that traders are closing out positions in anticipation of heightened volatility. In a single day, over $600 million in long positions were liquidated, forcing many traders who anticipated price increases to exit as Bitcoin prices fell.
Contrarily, the options market presents a more optimistic outlook, with a higher number of traders purchasing call options compared to put options, suggesting that some investors still anticipate a potential rebound. The $100,000 price point is evolving into a significant support area, with a concentration of trading activity around this level. Should Bitcoin manage to stay above this threshold, it may stabilize the market in the near term.
Altcoin Market Displays Increased Selling Pressure
Meanwhile, altcoins are facing steeper selling pressure compared to Bitcoin. XRP has seen a decline of nearly 5%, while Ethereum has dropped around 3.5%. The altcoin season index has fallen to 22 out of 100, signaling a lack of demand for altcoins and weak trader confidence. Despite this, tokens related to artificial intelligence are outperforming the broader market; Fetch AI (FET) has surged over 23%, and NEAR has gained approximately 22%, driven by robust trading activity on platforms like Binance and KuCoin.
Currently, Bitcoin remains near $99,984, approximately 20% below its recent all-time high. However, its long-term trend indicates continued strength, with 19.94 million BTC already in circulation out of a capped supply of 21 million. This scarcity is a crucial factor driving value. Although short-term indicators reveal weakness and momentum appears bearish, technical indicators like the RSI suggest that Bitcoin is approaching an oversold condition, hinting at a possible recovery. Long-term averages still reflect strength, indicating that the broader bullish trend could persist if Bitcoin can maintain the $100,000 support level.
