Bitcoin (BTC) has experienced a significant decrease, falling to $90,000 during early U.S. trading hours. This decline has reversed much of the recovery seen after last week’s drop, when Bitcoin hit a low of $84,000. The downward trend is also witnessed in other cryptocurrencies, particularly Ethereum (ETH), which dropped by 2%. Additionally, prominent altcoins such as Solana (SOL), Cardano (ADA), Dogecoin (DOGE), and Hyperliquid (HYPE) have all seen declines exceeding 4%.
Impact on the Cryptocurrency Market
This recent downturn in Bitcoin’s price aligns with analyst predictions, suggesting a consolidation period rather than a swift recovery for the crypto market as we approach year-end. Consequently, stocks related to cryptocurrency have also taken a hit, with companies like MicroStrategy (MSTR), Galaxy Digital (GLXY), CleanSpark (CLSK), and American Bitcoin (ABTC) suffering declines between 4% and 7%.
Market Trends and Patterns
Analysis from Velo indicates that the most bearish periods for Bitcoin over the past six months occurred in the hour leading up to the U.S. market opening and during the first hour of trading. Moreover, Fridays have emerged as the most consistently negative day of the week for Bitcoin’s performance.
Economic Indicators and Potential Recovery
On a more optimistic note, the University of Michigan released its Consumer Sentiment Index, which might help alleviate some of the bearish sentiment in the market. As of the latest report, the one-year Consumer Inflation Expectation decreased to 4.1%, down from 4.5%. The five-year Consumer Inflation Expectation also fell to 3.2%, compared to previous figures of 3.4%.
These private surveys have gained importance in the absence of substantial economic data. Following the release, Bitcoin managed a slight recovery, briefly trading around $91,000. With the Federal Reserve likely to cut interest rates at its final meeting of the year, market participants are centered on potential rates for early next year. If inflation continues to decrease, it might create opportunities for further rate cuts, which could positively influence risk markets and the cryptocurrency sector.
