Crypto Price Analysis 12-20 BITCOIN: BTC, ETHEREUM: ETH, SOLANA: SOL, BITTENSOR: TAO, INTERNET COMPUTER: ICP, FILECOIN: FIL, COSMOS: ATOM
Bitcoin (BTC) plunged below $100,000 following Federal Reserve Chair Jerome Powells comments on reducing rate cuts in 2025, rattling investors and leading to a massive selloff across asset classes.
The Federal Reserve has projected only two rate cuts for 2025, down from the initially forecasted four. Following the announcement, BTC registered a substantial drop, falling below $100,000 to a low of $95,875 before marginally recovering.
Powells comments led to a bloodbath in the crypto markets, with all major cryptocurrencies in the red. BTC is currently down over 4% and trading at $97,829, with the bears firmly in control. Meanwhile, Ethereum (ETH) is down over 8% and has slipped below $3,500, with sellers now eying the $3,000 level. Solana (SOL) tanked almost 8% as well and has surrendered nearly all of its post-election gains. Dogecoin (DOGE), Cardano (ADA), Chainlink (LINK), Toncoin (TON), Polkadot (DOT), Uniswap (UNI), and Litecoin (LTC) also registered substantial losses.
Bitcoin (BTC) Plummets Following Feds Rate Cut Announcement
Bitcoin (BTC) registered a sharp decline following the Federal Reserves announcement of a rate cut, as its price tanked below $100,000. The drop comes after BTC set a new all-time high as markets turned bearish following the FOMC meeting. The interest rate cut of 25 basis points was along expected lines. However, Powells comments signaled a slower pace for future reductions. Powell stated that rate cuts in 2025 will be smaller due to previous inflationary pressures, with the Fed Chairs remarks sparking a cautious mood across markets, and cryptocurrencies registered a drop almost instantly.
The Feds announcement also led to crypto derivatives positions worth $700M liquidated, with Bitcoin long positions accounting for a significant chunk. Altcoins fared considerably worse, with Ethereum (ETH) dipping below $3,500. Cardano (ADA), Litecoin (LTC), Dogecoin (DOGE), Chainlink (LINK), and several other prominent altcoins also registered substantial drops. The crypto market cap has declined over 4% and is currently at $3.36 trillion.
The drop comes after a period during which crypto prices surged, with Donald Trump emerging victorious in the US elections. Markets rose in hopes of a pro-crypto administration and clear regulatory guidelines. Joel Kruger, market strategist at LMAX Group, stated,
The crypto market has already been on pins and needles around the possibility of a correction following the record run in the price of bitcoin through $100,000. We got that catalyst from the world of traditional markets. The fallout from Wednesdays Fed decision was simply too much to ignore.
However, some, like Azeem Khan, co-founder of Morph felt the pullback was healthy considering the market's growth.
When you zoom out and consider the year-over-year growth, a pullback like this feels healthy. Its also worth noting that, historically, year-end selloffs in securities can occur as investors offset losses against gains to lower their tax liabilities. While its hard to say how much of this is driving the current trend, it could be a contributing factor.
Losses From Crypto Hacks Jump To $2.2 Billion
Losses from major crypto hacks surged 21% to $2.2 billion in 2024, exceeding $1 billion for the fourth year in a row. Smaller hacks also increased from 282 in 2023 to 303 in 2024. According to Chainalysis, markets are bound to see hacks as crypto adoption surges.
As the digital asset market booms, it is typical to see illicit use of crypto grow in tandem. Countering the proliferation of these crimes, especially fraud will undoubtedly be a key challenge to the industry in the new year.
Some of the most notable hacks include the loss of over $305 million from Japanese crypto exchange DMM Bitcoin and over $230 million from WazirX.
El Salvador Strikes Deal With IMF
El Salvador has scaled back its Bitcoin and crypto dream to reach an agreement with the International Monetary Fund (IMF) for a $1.4 billion loan deal. According to the IMF, risks from El Salvadors adoption of Bitcoin (BTC) had reduced significantly after the country allowed businesses to decide whether they wished to accept Bitcoin or not. El Salvador is the first country to adopt BTC as legal tender.
The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies. Legal reforms will make the acceptance of Bitcoin by the private sector voluntary. For the public sector, engagement in Bitcoin-related economic activities and transactions in and purchases of Bitcoin will be confined.
The IMF has been extremely critical of El Salvadors decision to give BTC legal tender status and warned it could become a hurdle if the country needed financial assistance.
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) has registered a sharp decline following Fed Chair Jerome Powells hawkish comments on rate cuts. The Feds stance rattled investors, leading to a selloff across asset classes. As a result, BTC plummeted below $100,000, falling to a low of 95,630 before recovering to its current levels. The worlds largest cryptocurrency has continued to drop for the third straight day thanks to growing macroeconomic pressure. The market selloff intensified after the Fed forecasted just two rate cuts in 2025, against previous expectations of four. The uncertainty surrounding the creation of a strategic Bitcoin reserve is also negatively impacting the asset price. President-elect Donald Trump had repeatedly raised the prospect of a Bitcoin reserve similar to the countrys strategic oil reserves. However, such an initiative will likely face regulatory hurdles.
BTC recovered from a substantial decline at the beginning of last week, rising over 4% on Wednesday to go above the 20-day SMA and settle at $100,900. However, buyers could not sustain momentum and the price dropped almost 1% on Thursday to settle at $99,923. BTC recovered on Friday to reclaim the $100,000 level and settle at $101,394 before registering a marginal decline on Saturday. However, bullish sentiment returned on Sunday as BTC rose almost 3% to go above $104,000 and settle at $104,181.
Source: TradingView
Buyers retained control on Monday as BTC reached an intraday high of $107,464. However, it could not stay at this level and fell to $105,746, ultimately registering an increase of 1.50%. Tuesday saw BTC register a new all-time high, reaching $108,268 before marginally declining and settling at $106,142. Sentiment changed drastically on Wednesday as the markets turned bearish. As a result, BTC plummeted almost 6% and fell to $100,189, barely holding on to $100,000. BTC continued to decline on Thursday after buyers failed to mount a recovery, falling by 2.48% to go below the 20-day SMA and $100,000 to settle at $97,703, but not before hitting an intraday low of $95,630. The current session sees BTC marginally up as buyers and sellers struggle to establish control.
Ethereum (ETH) Price Analysis
Ethereum (ETH) has slipped below the $3,500 level as it continues to decline, thanks to short-term holders' panic selling. However, long-term holders have remained inactive, and declining exchange reserves could indicate the decline is temporary. Nonetheless, the drop is substantial and ETH could plummet to the psychological $3,000 mark and surrender a significant chunk of its post-election gains.
ETH made a strong recovery on Wednesday after plummeting to a low of $3,521 a day prior, rising almost 6% to go above the 20-day SMA and settle at $3,834. Buyers attempted a move past $4,000 on Thursday as ETH reached an intraday high of $3,988. However, it could not stay at this level and dropped to $3,882, ultimately registering an increase of 1.26%. Buyers retained control on Friday, and ETH registered a marginal increase to go above $3,900 and settle at $3,907. However, it fell back on Saturday, dropping almost 1% to $3,869.
Source: TradingView
Buyers returned to the market on Sunday as ETH registered an increase of 2.25% to go above $3,900 and settle at $3,956. ETH faced considerable volatility on Monday as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand, and ETH registered a marginal increase to settle at $3,985, still unable to go above the $4,000 mark. Sentiment changed on Tuesday as ETH dropped over 2% to $3,892. Bearish sentiment intensified on Wednesday as ETH went below the 20-day SMA after a drop of almost 7% and settled at $3,625. Buyers attempted a recovery on Thursday as ETH rose to an intraday high of $3,763. However, they lost momentum after reaching this level, allowing sellers to take control. As a result, ETH plummeted almost 6%, going below the $3,500 level and settling at $3,416. The current session sees ETH marginally down as sellers continue to lower the price.
If bulls fail to step in and stop the decline, ETH could drop to $3,000. On the other hand, if ETH can rebound from its current level, it could reclaim the $3,500 level.
Solana (SOL) Price Analysis
Solana (SOL) has almost surrendered all its post-election gains as it continues to drop. The altcoin slipped below $200 on Thursday as bearish sentiment around the asset increased considerably. SOL has been unable to go above the 20-day SMA, which acted as a dynamic resistance level. It reached an intraday high of $234 on Thursday as buyers hoped to build on Wednesdays momentum. However, it could not go above this level and fell back to $227, ultimately registering a marginal decline. Sellers retained control on Friday as SOL dropped almost 1% to $224. Bearish sentiment intensified on Saturday as SOL dropped to an intraday low of $215 before settling at $219 after a drop of 2.22%.
Source: TradingView
The price recovered on Sunday as SOL rebounded from the 50-day SMA, rising almost 2% to settle at $224. However, buyers could not build momentum, and SOL was back in the red on Monday, dropping by 3.55% and settling at $216. Tuesday saw an uptick in volatility as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand, pushing SOL up over 3% to $223. However, bearish sentiment returned on Wednesday as SOL dropped over 7% to go below the 20-day SMA and settle at $206. SOL fell below $200 on Thursday as it fell 6.15% to $193. The current session sees SOL firmly in the red, with the price down almost 2% and trading at $190.
Bittensor (TAO) Price Analysis
Bittensor (TAO) has turned bearish after reaching a peak of $748 on December 6, with its price plummeting substantially at the beginning of the previous week. By Friday, TAO dropped to an intraday low of $562 as bearish sentiment intensified considerably. The weekend saw the price drop lower as TAO registered a decline of almost 3% and settled at $561.It recovered on Sunday to register an increase of 2.24% and end the weekend at $573. However, this is where market sentiment around the asset went downhill. TAO started the current week on a bearish note, dropping almost 6% to slip below the 50-day SMA and the key $550 level to $518.
Source: TradingView
The price continued to drop on Tuesday and Wednesday as TAO fell by 4.17% and 3.59%, slipping below $500 and settling at $499. Bearish sentiment intensified on Thursday as TAO dropped over 10% to go below $450 and settle at $447. Buyers attempted a recovery during the current session as TAO reached an intraday high of $469. However, sellers have retaken control, and TAO is currently down almost 3% and trading around the $433 mark. If sellers retain control, TAO could drop to $400, where it could find support.
Internet Computer (ICP) Price Analysis
Internet Computer (ICP) recovered after dropping to an intraday low of $10.85 last Tuesday. By Thursday, it had gone above the 20-day SMA and reached an intraday high of $14.18 before settling at $13.68. However, it entered the weekend on a bearish note, dropping by 1.17% on Friday and almost 5% on Saturday to go below the 20-day SMA and settle at $12.87. The price recovered on Sunday as ICP rose 2.33% to $13.17, just short of going above the 20-day SMA.
Source: TradingView
ICP turned bearish on Monday after buyers failed to stay above the 20-day SMA, dropping almost 4% and settling at $12.68. Sellers retained control on Tuesday as ICP dropped nearly 5% to $12.07. Bearish sentiment registered a substantial uptick from here on, as ICP fell almost 8% on Wednesday to settle at $11.11. Thursday saw the price drop below the 50-day SMA as ICP settled at $10.15 after falling nearly 9%. Buyers attempted to move above the 50-day SMA during the current session as ICP reached an intraday high of $10.77. However, they lost momentum at this level, allowing sellers to lower the price. ICP is currently down almost 3% and trading at $9.88, losing the crucial $10 level.
Filecoin (FIL) Price Analysis
Filecoin (FIL) has also lost momentum this week as markets turned bearish after Bitcoin (BTC) dropped below $100,000. FIL slipped below the 20-day SMA last week when it fell to a low of $5.68. Since then, it has struggled to build momentum, reclaim key levels, and failed to go above the 20-day SMA. FIL entered the weekend on a bearish note, dropping almost 5% to $6.42. It recovered on Sunday, registered an increase of 4.31%, and settled at $6.70. Buyers attempted to go above the 20-day SMA on Monday but could not, as FIL dropped 2.75% to $6.52.
Source: TradingView
The price continued to drop on Tuesday as FIL fell by 3.65% and settled at $6.28. Wednesday saw a considerable uptick in bearish sentiment as FIL dropped almost 10% to go below $6 and settle at $5.66. FIL dipped below the 50-day SMA on Thursday, registering a drop of just over 10% and settling at $5.09. The current session sees FIL down just over 5% as sellers look to drive it towards the 200-day SMA.
Cosmos (ATOM) Price Analysis
Cosmos (ATOM)s post-election rally halted abruptly in the first week of December as bulls lost momentum after reaching $12.25. By the beginning of last week, ATOM plummeted below the 20-day SMA and fell to a low of $7.25 before recovering to go above $9 by Friday. Despite a strong recovery, ATOM could not go above the 20-day SMA and fell back in the red at the beginning of the current week, falling by 2.52% and settling at $8.87. Sellers retained control on Tuesday as ATOM dropped almost 4% to $8.53. A substantial drop of 10.27% on Wednesday saw ATOM slip below $8 and settle at $7.65.
Source: TradingView
Bearish sentiment intensified on Thursday as ATOM slipped below the 50-day SMA and settled at $6.81, a drop of almost 11%. The current session sees ATOM firmly in the red, down 6.53% and trading at $6.36.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Text source: Crypto Daily™
