The cryptocurrency market saw further losses today, extending a weak performance over the past week. Bitcoin fell below $104,000, down nearly 4% in the past 24 hours and approximately 9% for the week. Ethereum dropped below $3,500, and Solana is now trading under $160. XRP has slipped to $2.25.
Other major tokens followed a similar trend, with most of the top assets showing daily declines of at least 6%. The broader market cap is down more than 3% today and nearly 10% over the week.
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Why Is Everything Falling?
Several factors contributed to the sell-off. One major driver is uncertainty surrounding U.S. monetary policy. Recent comments from Federal Reserve Chair Jerome Powell lowered expectations of a December rate cut. Traders had previously priced in a 96% chance of a cut, but those odds have now dropped to below 70%. The shift led to a stronger U.S. dollar and weaker appetite for risk assets, including cryptocurrencies.
In addition, there was a major exploit in the DeFi sector. Balancer, a decentralized finance protocol, lost $116 million in a hack involving its V2 stablecoin pools. The incident led to further concerns about smart contract risks and caused some other platforms to freeze collateral linked to the affected token.
Read also: Bitcoin and Ethereum Slip After Second Fed Rate Cut
Markets Are Scared
Indicators point to high caution among traders. The Crypto Fear and Greed Index is at 21, deep into the “extreme fear” range. This is a significant drop from the previous day’s reading of 42 and reflects increased market anxiety.
Trading activity has increased, but much of it appears to be driven by forced selling. Spot market volume is up over 100%, while derivatives volume has risen by more than 140%, according to aggregated data. These movements suggest that much of today’s market action is reactive rather than based on new demand.
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What to Watch Next
Attention is now turning to upcoming economic data releases, particularly the U.S. Consumer Price Index (CPI) report on November 8. A higher-than-expected inflation reading could reinforce the Fed’s cautious stance and potentially extend the current downtrend in crypto markets.
Analysts are also watching to see whether Bitcoin can find support above the $100,000 level, and whether the total crypto market cap will remain above $3.5 trillion in the coming days. A prolonged drop below this level could shift focus to April’s lows near $3.28 trillion. Until there is more clarity on macroeconomic conditions and market stability, traders are likely to remain cautious.
