Why are cryptocurrencies falling as market cap drops to $3.3 trillion? Will cryptocurrencies recover in 2025? Learn more about the cryptocurrency collapse here.
The cryptocurrency market is turbulent as the bulls hold out, trying to absorb the deluge of selling pressure seen for the better part of this week. Although confidence is high, there is not much for optimistic buyers. If anything, Bitcoin and the top crypto assets have been inches away from critical support levels for several weeks.
From the weekly chart, Bitcoin Trajectory .cwp-coin-chart svg { stroke: ; Stroke width: ; }
price
Trading volume within 24 hours
Recent price action 7D
It found strong support at $90,000 and is inside the bull flag. Overall, there is hope that prices will recover, break the $100,000 barrier and resume the uptrend of Q1 2024. Any rise will be a much-needed tailwind for Ethereum, Dogecoin, Solana, and top altcoins, which have already fallen by double digits in a week. Recent trading.
According to Coinjiku, the total market capitalization fell by approximately 4% to $3.3 trillion.
The decline seen this week is partly due to strong economic data out of the US and a significant influx into perpetual cryptocurrency platforms. At Binance, Bybit and OKX, billions of dollars worth of leveraged positions were liquidated.
From what is visible in the markets, questions are starting to emerge about whether Bitcoin and cryptocurrencies will rebound in the face of better-than-expected macroeconomic events.
Why did encryption decline? Everything you need to know about the ongoing collapse of cryptocurrencies
Earlier this week, the US Bureau of Labor Statistics revealed more job openings by the end of November. By the end of November, there were 8.1 million open jobs versus the expected 7.6 million. This number indicates a strong labor market, coming when there are concerns about a recession in the United States.
Later today, non-farm payrolls (NFP) results will be released. Economists expect the economy to create 160,000 jobs, down from more than 224,000. If the released data exceeds economists’ estimates, the US dollar may rise, pushing cryptocurrency prices lower.
(source)
A stronger US dollar will trigger more long liquidations, as we saw this week. According to Coinglass, more than $336 million worth of positions were closed in the past 24 hours. Specifically, $224 million worth of leveraged trades on Binance, OKX, and Bybit were forcefully closed. Meanwhile, $111 million of short positions were liquidated.
(source)
In total, more than 123,000 traders were liquidated.
Overall, the Fed continues to prioritize labor market data as it develops its next monetary policy moves. If there is an improvement and the economy continues to create more jobs, the likelihood of the central bank cutting interest rates aggressively will diminish. In contrast, the hawkish stance strongly affects speculative assets, pushing prices down.
In this scenario, bond yields would also rise, forcing capital into Treasuries, and away from Bitcoin and “riskier” cryptocurrencies.
Will Bitcoin, Ethereum, and Altcoin Prices Recover?
Technical candlestick formations still favor buyers. As such, Bitcoin bulls could take over.
(Bitcoin/Dollar)
However, it is worth noting that during the current crypto downturn, central banks appear to be shifting away from interest rate cutting regimes towards maintaining fixed rates or proposing higher rates. For this reason, stocks and cryptocurrencies could experience liquidity outflows, amplifying the vulnerabilities of Bitcoin and altcoins to macroeconomic shocks.
The good news is that Donald Trump is back in office, and his administration’s policies could support cryptocurrencies. Trump, as we saw during his election campaigns, was much more friendly to cryptocurrencies.
Meanwhile, Gary Gensler, the head of the Securities and Exchange Commission (SEC), will step down this month. The president-elect will replace him with the more crypto-friendly Paul Atkins.
His nomination could stimulate growth, allowing clearer rules for cryptocurrencies to be formulated and less scrutiny.
explores: 15 New and Future Coinbase Listings to Watch in 2025
Join the 99Bitcoins News Discord here to get the latest market updates
The post When will cryptocurrencies be redeemed? Why does crypto continue to decline? appeared first on 99Bitcoins.