After U.S. equities took a major hit yesterday, Bitcoin once again fell below the $100,000 mark. At the time of writing, the world’s leading cryptocurrency is trading just above $96,000 — about 6% lower than 24 hours ago.
Ethereum is taking an even bigger hit — down nearly 10%, trading around $3,200. The broader altcoin market is also under pressure. Story Protocol is posting the largest drop (-20%), and despite the launch of the XRP ETF by Canary Capital, Ripple’s token is down almost 8%. U.S. stocks also closed deep in the red: the S&P 500 fell 1.7%, while the Nasdaq Composite lost 2.3%.
Investor sentiment continues to deteriorate as uncertainty grows over the Fed’s next steps. The probability of a December rate cut has slipped to just 52%, compared to 63% the day before. With the six-week government shutdown now over, concerns about the health of the U.S. economy are back on the radar.
Although the S&P 500 sits only a few percentage points below its all-time high, the U.S. stock market’s Fear & Greed Index remains in “Extreme Fear.” Many investors worry that the ongoing equity rally — fueled in part by cross-investment among OpenAI, Oracle, Nvidia and others — could morph into a burgeoning AI bubble.
Bitcoin is also facing pressure from large, long-term whales offloading their holdings. These sellers are positioning for a potential new crypto bear market, following the traditional four-year cycle. Some analysts, however, argue that this framework is outdated due to the shrinking impact of halvings and the rising dominance of institutional capital.
Bullish sentiment, meanwhile, is supported by expectations of a future expansion of the Federal Reserve’s balance sheet.