The cryptocurrency market experienced declines along with other global risk assets as investors withdrew ahead of crucial U.S. economic indicators, extending a downturn from December characterized by reduced liquidity and increasing caution across the board.
Bitcoin dropped towards $85,800 during Asian trading, marking a more than 4% decline over the week, as selling pressure affected major tokens.
Ether fell to around $2,930, while solana , and all recorded weekly declines exceeding 5%, indicative of a general retreat rather than issues specific to any tokens.
Macro Outlook
This movement reflected broader weakness in the global markets. Asian equities saw significant declines, with the MSCI Asia Pacific Index down by 1.3%, while U.S. equity futures weakened ahead of the upcoming November jobs report, anticipated to reveal a cooling labor market.
The dollar remained near two-month lows, and the yen appreciated to approximately 155 per dollar ahead of a widely predicted interest rate hike from the Bank of Japan later this week.
Crypto market capitalization decreased to around $3.06 trillion, slipping 0.2% over the past 24 hours and more than 2% for the week. Although the market has managed to defend the $3 trillion mark over the last ten days, analysts suggest the transition from an upward trend to sideways support indicates weakened momentum rather than renewed strength.
“The shift from an uptrend to horizontal support does not signal a positive outlook for buyers,” commented Alex Kuptsikevich, chief market analyst at FxPro, in an email. “Selling pressure since late November has disrupted the short-term structure, leading the market into a consolidation phase with ongoing downside risks.”
Sentiment indicators reveal growing apprehension. The crypto fear and greed index has plummeted to 16, its lowest reading in nearly three weeks, signaling extreme caution.
The extended period of fear without a clear catalyst mirrors earlier cycles of weakness observed at the conclusion of past market trends.
$81,000 as a baseline
Bitcoin momentarily dipped below $87,500 earlier this week before bouncing back toward $90,000, but the overall technical outlook has worsened.
FxPro analysts suggest that a return to the $81,000 range now represents the baseline scenario, although a period of range-bound consolidation remains possible if selling pressure diminishes.
Nevertheless, broader indicators indicate that the market is entering a more substantial correction phase. Binance Research estimates that the total cryptocurrency market capitalization has decreased by about 15% in the last 30 days.
December is typically associated with lower liquidity, increasing the likelihood of more pronounced price fluctuations as traders adjust their positions for year-end.
Prediction markets also convey a more cautious perspective. On Kalshi, most users predict that Bitcoin will end the year below $100,000, with the likelihood of reaching above that threshold remaining at just 23%.
