The cryptocurrency market has faced a severe setback, with Bitcoin (BTC) leading a broad decline. The world’s most popular cryptocurrency dropped to $93,000 this Friday, marking a 15% loss from its all-time high of $108,388 reached on Tuesday. This sharp correction, driven by the U.S. Federal Reserve’s increasingly hawkish stance on monetary policy for 2025, erased more than 9% of the market’s total capitalization, dragging major altcoins down as well.
In the past 24 hours alone, over $1.1 billion in crypto derivatives positions were liquidated. Moreover, the crypto market’s fear and greed index, which had consistently shown “extreme greed” throughout the last month, has now shifted back to “greed,” reflecting a noticeable change in investor sentiment and growing caution.
Altcoins in Freefall
Bitcoin’s retreat had a ripple effect across the altcoin market. Ethereum (ETH) dropped 14.16% to $3,100, while Cardano (ADA) experienced an even steeper fall of 19.39%, trading at $0.78. Ripple (XRP) and Solana (SOL) recorded declines of 14.40% and 13.31%, respectively, while Binance Coin (BNB) slid by 9.84%. These significant losses highlight the market’s enduring volatility and the wavering confidence among investors.
Comments from Federal Reserve Chair Jerome Powell further contributed to the market’s turmoil. Powell reaffirmed that the Fed does not own Bitcoin and has no plans to purchase it, citing legal restrictions. He also emphasized that any change in this stance would require Congressional approval, adding more uncertainty to an already unstable market.
Despite the downturn, major investors, often called “whales,” have been accumulating Bitcoin, Ethereum, and Chainlink (LINK) while offloading more speculative assets such as Shiba Inu (SHIB) and Pepe (PEPE). This trend suggests a growing preference for cryptocurrencies with strong fundamentals over high-risk bets, signaling a potential shift in market dynamics.
With global economic uncertainty looming and the Fed’s future policy direction in question, the cryptocurrency market finds itself at a critical juncture. For now, Bitcoin has failed to establish a solid support level, leaving investors to wonder: is this a golden buying opportunity or the start of a prolonged period of instability?
