Cryptocurrency markets are facing a downturn as Bitcoin and Ethereum struggle to maintain their positions. Recent trends indicate a shift toward bearish sentiment, particularly as the likelihood of a December interest rate cut by the Federal Reserve diminishes.
The turmoil has seen both leading cryptocurrencies fall further from their all-time highs, with Bitcoin now trading below $87,000, a significant decline of over 30% from its recent peak above $126,000. This downturn has been exacerbated by a broader macroeconomic uncertainty impacting both crypto and traditional markets.
Traders on the Myriad platform have shifted their predictions, now estimating an 80% probability that Bitcoin will drop to $85,000 before it can recover to $115,000. This marks a notable 34% increase in bearish sentiment just within the past week, coinciding with Bitcoin”s 12% price drop.
Meanwhile, Ethereum hasn”t escaped the downward trend, as it also sees a decline of 10% over the past week and 27% month-over-month, currently trading below $3,000 for the first time since July. The odds now favor a dip to $2,500, with 70% of predictors believing this outcome is more likely than a rise back to $4,000.
Analysts have noted that the liquidity among Ethereum holders appears weaker than that of Bitcoin holders, potentially contributing to the volatility. Despite bullish calls from influential figures like Tom Lee of BitMine, who anticipates an Ethereum supercycle, the market sentiment remains cautious.
Furthermore, the Federal Reserve”s recent communications have influenced market expectations. Following a rate cut in October, the Fed”s indication that another cut in December is not guaranteed has led to increased uncertainty among traders, with many now predicting no further cuts this year.
The next Federal Open Market Committee (FOMC) meeting on December 9 and 10 will be pivotal, as it could clarify the Fed”s monetary policy direction and its potential impact on the cryptocurrency markets.
As the landscape evolves, both Bitcoin and Ethereum investors will be closely monitoring these developments, weighing their strategies in this increasingly bearish environment.
