The global cryptocurrency market experienced significant volatility over the past 24 hours, severely weakening investor risk appetite. The total market capitalization decreased by 3% to $3.1 trillion. Bitcoin 
$78,415 dropped from over $94,000 to $89,975, while Ethereum 
$2,475 and XRP fell by 3.4% and 4% to $3,123 and $2, respectively. Mid-sized tokens suffered even heavier losses, negatively impacting the overall market sentiment. Uniswap, Polkadot, and Ethena depreciated by 7%, 8%, and 10%, respectively. Although the Fear and Greed Index remained at 29, it failed to conceal the market’s nervousness.
Fed’s Hawkish Rate Cut Shakes Markets
The primary driver behind the market’s fluctuation was the highly anticipated 25 basis point rate cut by the Fed on December 10. Even though the market predicted an 89% probability of this cut, the expected relief did not materialize. Fed Chairman Jerome Powell highlighted that inflation remained above target, signaling only limited monetary policy easing. The cut was delivered with a more hawkish tone than the market had hoped for.
Powell’s cautious remarks led to a rise in the US 10-year Treasury yield to 4.25%, tightening financial conditions and exacerbating pressure on leveraged positions in the crypto market. According to CoinGlass data, $519 million worth of positions were liquidated in the last 24 hours, with $370 million attributed to long positions. This decline in open position ratios to $131 billion demonstrates investors’ tendency to reduce risk exposure.
Impact of Japan and Global Pressures
Compounding the uncertainty from the US, interest rate signals from Japan also unsettled markets. The yield on Japan’s 2-year bond exceeded 1% for the first time in a decade, rendering yen-funded carry trade positions risky. The unwinding of these positions reduced global leverage usage, further destabilizing crypto prices.
Analysts suggest Bitcoin may find its first strong support between $88,000 and $84,000. Standard Chartered reported the “hawkish” Fed decision led them to revise year-end price targets downward. Coin Bureau’s co-founder, Nic Puckrin, noted that the prevailing uncertainty diminishes the possibility of a strong rally in December. He believes short-term recovery is feasible only with more stable funding conditions and clearer demand signals from the spot market.
Meanwhile, recent macro signals from the European Central Bank (ECB) also contribute to a cautious mood in the crypto market. Higher-than-expected core inflation data in the Eurozone complicates the ECB’s ability to lower interest rates soon, similar to the Fed’s situation, weakening investors’ desire for riskier assets and supporting downward pressure in the crypto market.
