The first trading day of December began with another downturn across the crypto market, reversing last week’s attempt at stabilization. Bitcoin fell more than 5% in early trading, dropping to about $86,000 after briefly moving back above $90,000 last week.
Ethereum followed a similar pattern, falling below $2,900 after recovering the $3,000 mark during the weekend. Major altcoins also came under pressure. XRP, BNB and Solana each posted losses exceeding 5%, with Solana at $126 and XRP holding slightly above $2.
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Sentiment Weakens Again
Market sentiment deteriorated after showing early signs of improvement yesterday. The Fear and Greed Index slipped back into Extreme Fear territory, now at 24, ending the short break from persistent negative readings that lasted for over two weeks. The CoinMarketCap equivalent remains firmly in Extreme Fear with a score of 20.
Read also: Crypto Sentiment at Record Low: Fear and Greed Index Hits 10 for Second Day
Broader Market Conditions
US equity futures moved lower in early Monday trading, signaling a weaker start to the new month. Futures tied to the Dow Jones Industrial Average, S&P 500 and Nasdaq 100 declined between 0.5% and 0.9%.
The pullback follows gains last week, when major indexes advanced on rising expectations of an interest rate cut in December. Data releases are returning to regular schedule following the end of the government shutdown, with delayed PCE inflation data and several employment indicators expected throughout the week.
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Week Ahead
The crypto market enters a busy period for macro events. Federal Reserve Chair Jerome Powell is scheduled to speak later today, intersecting with the formal end of the Fed’s quantitative tightening program. Investors will be watching for any comments regarding interest rates ahead of the December policy meeting.
ADP employment data arrives Wednesday, followed by jobless claims and the delayed PCE inflation release later in the week. These reports carry potential to shift expectations around rate cuts, a factor that has influenced crypto trading over recent months.
Read also: How Interest Rates Impact Bitcoin: Exploring the Correlation
Market Context
Despite renewed weakness, the broader trend still reflects the volatile conditions that developed throughout November. Bitcoin remains down from the highs near $126,000 reached in October, but the market has moved through several sharp liquidation phases since early October that contributed to current trading levels.
While sentiment remains negative, leveraged positioning has decreased meaningfully in recent weeks, and major indicators from long-term holders show no significant structural change in demand.
