The cryptocurrency market experienced a decline of 0.74% in the last 24 hours, contributing to a weekly drop of 7%. Bitcoin has seen a significant downturn, now trading below $88,000, which indicates persistent bearish sentiment. Ethereum also faced heavy selling pressure, further exacerbating the overall market weakness. Notably, other major altcoins such as Solana, Dogecoin, and Cardano experienced even sharper declines.
The current downturn reflects a growing sense of caution among traders, as technical indicators across the board remain unfavorable. Today”s market contraction has led to a reduction in total market capitalization, which now stands at $2.93 trillion, highlighting the prevailing market fragility.
This decline is occurring just ahead of a crucial announcement from the Bank of Japan (BoJ) set for December 19, which is anticipated to have significant implications for global liquidity. There is speculation that the BoJ could raise interest rates up to 0.75%, marking the highest level in three decades. Given Japan”s status as a leading foreign holder of U.S. Treasury bonds, any tightening of monetary policy could lead to decreased international dollar liquidity, which tends to place additional stress on risk assets like Bitcoin and the broader cryptocurrency market.
In addition to international factors, the U.S. regulatory landscape has also been a source of concern. The Senate Banking Committee has postponed discussions on the long-awaited cryptocurrency market structure bill, leaving investors facing uncertainty regarding future regulations. The hearings related to this matter are not expected to take place until early 2026, amplifying the volatility in the market.
Moreover, there has been a notable outflow of capital from cryptocurrency exchange-traded funds (ETFs), with Bitcoin and Ethereum ETFs experiencing net outflows exceeding $1 billion in just 48 hours. This trend suggests a redistribution of assets by institutional investors. The recent price volatility has also resulted in the liquidation of over $400 million in leveraged positions across major exchanges.
Despite signs of the market being oversold, which could indicate a potential short-term recovery, the overall environment remains precarious. The influence of macroeconomic factors combined with diminishing investor trust has created a challenging landscape for cryptocurrencies. Traders are closely monitoring the upcoming decision from the BoJ to gauge the market”s direction.
Currently, Bitcoin is priced at $86,741, reflecting a 0.3% decrease, while Ethereum has dropped 3.9% to $2,835. BNB is trading at $839, Solana at $123, and Dogecoin has fallen below $0.13. Cardano has also noted a 4% drop during this period. Analysts suggest that if the selling pressure continues, Bitcoin could potentially decline to around $80,000, while Ether might face a drop to $2,500 if bearish momentum persists.
