CandleFocus

Crypto Market Drops 10% as Over $1 Billion Liaquidated Since Fed’s Rate Cuts

Author: Content Editor
The crypto market has experienced a significant liquidation of nearly $1.25 billion in the past 24 hours, resulting in a nearly 10% decline. Bitcoin dropped below $96,000, and meme coins were hit the hardest. The liquidation was triggered by the Federal Reserve's 25 basis point interest rate cut and their 2025 projections of higher inflation and only two interest rate cuts next year. However, analysts believe that this is just a short-term correction and that the bullish sentiment will return after December 17. Some analysts are also predicting an altcoin season as increasing liquidation for Bitcoin may impact its dominance and create opportunities for major altcoins like Ethereum and Solana. Despite the macroeconomic factors, Bitcoin is still up by nearly 130% this year, and developments in the crypto industry, such as big purchases by companies like MicroStrategy and potential regulatory shifts, outweigh these factors. Additionally, the Bitcoin market is showing signs of a potential supply shock as rising demand meets a shrinking supply of BTC available for sale. The stablecoin market cap has reached $200 billion, indicating fresh liquidity, and optimism around pro-crypto policies and potential US initiatives is fueling demand. The sell-side liquidity has dropped, and the market conditions are tightening, which could have contributed to the recent liquidations.

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