The cryptocurrency market experienced a downturn alongside global risk assets as investors took a step back ahead of significant U.S. economic data, continuing a December decline characterized by reduced liquidity and increasing caution in the markets.
Bitcoin dropped toward $85,800 during Asian trading, marking a decline of over 4% in the last week, as selling pressure affected major tokens.
Ether fell to around $2,930, while Solana , and all experienced weekly losses exceeding 5%, highlighting a broad retreat rather than issues specific to individual tokens.
Macro Outlook
This decline was mirrored by weakness in global markets. Asian equities declined sharply, with the MSCI Asia Pacific Index dropping 1.3%, while U.S. equity futures softened ahead of Tuesday’s November jobs report, which is anticipated to indicate a cooling labor market.
The dollar lingered near two-month lows, and the yen strengthened to approximately 155 per dollar in anticipation of a widely expected rate hike by the Bank of Japan later this week.
Crypto market capitalization slipped to around $3.06 trillion, down 0.2% over the past 24 hours and more than 2% over the week. Although the market has been able to defend the $3 trillion level over the last ten days, analysts indicate that the transition from an upward trend to sideways support indicates a weakening momentum rather than a sign of renewed strength.
“The shift from an uptrend to horizontal support is not a positive signal for buyers,” stated Alex Kuptsikevich, chief market analyst at FxPro, in an email. “The selling pressure observed since late November has disrupted the short-term structure, and the market is currently in a consolidation phase with ongoing downside risks.”
Sentiment indicators are showing increased unease. The crypto fear and greed index has dropped to 16, its lowest point in nearly three weeks, demonstrating extreme caution.
The prolonged duration in the fear zone without a distinct catalyst mirrors periods of cyclical weakness observed at the end of past market cycles.
$81,000 as a baseline
Bitcoin briefly fell below $87,500 earlier this week before bouncing back toward $90,000, but the overall technical landscape has worsened.
FxPro analysts suggest that a return to the $81,000 region now represents the baseline scenario, although there is potential for a range-bound consolidation if selling pressure subsides.
However, broader indicators imply that the market is entering a more pronounced corrective phase. Binance Research estimates that the total crypto market capitalization has decreased by about 15% over the past 30 days.
December is usually a period of lower liquidity, heightening the risk of more pronounced price fluctuations as traders adjust their positions ahead of the year-end.
Forecast markets also indicate a more cautious outlook. On Kalshi, most users anticipate bitcoin will end the year below $100,000, with the probability of a rise above that threshold sitting at just 23%.
