The cryptocurrency market is experiencing a notable downturn as Bitcoin fell below the $95,000 mark on December 8, 2024, continuing a downward trend that started over the weekend. The world’s leading digital asset slipped 3.5% within 24 hours, trading around $94,800, following a recent high of $98,200 just two days prior.
Ethereum, the second-largest cryptocurrency by market capitalization, witnessed an even steeper decline, plummeting 5.2% to approximately $3,750 as market sentiment shifted. This slump came amidst mixed performances from other altcoins, with XRP and Solana suffering losses of 2.8% and 4.1%, respectively.
Altcoin Performance Varies
Despite the general downturn, Cardano managed to grab some positive interest, posting a modest gain of 1.3%. BNB, on the other hand, remained relatively flat, recording only a 0.2% decrease. Total cryptocurrency market capitalization saw a significant drop, declining by roughly $120 billion, although trading volume surged by 15% as market participants reacted to the plummeting prices.
Impact on Traditional Markets
The broader market reflected similar pessimism, with stock indices opening lower on December 8. The S&P 500 index fell 0.4% during early trading, while the Nasdaq Composite declined by 0.6%. Meanwhile, the Dow Jones Industrial Average registered a 0.3% drop, predominantly driven by losses in technology stocks.
Treasury yields also rose, as the yield on the 10-year Treasury note climbed to 4.18%, an increase from the previous day’s 4.15%. In contrast, gold prices edged up 0.8%, reaching $2,665 per ounce as investors turned to safe-haven assets amid the market turmoil.
Increased Trading Activity
The heightened volatility in the crypto market led to an uptick in trading activities. Data revealed that exchanges like Binance processed over $45 billion in 24-hour volume across all trading pairs. Coinbase, a major player in the retail sector, reported a 20% rise in trading volume, mostly driven by its Bitcoin trading pair.
In the futures market, increased short interest was noted as traders anticipated further price declines. The open interest for Bitcoin futures on the CME approached $12 billion. Additionally, the Bitcoin fear and greed index slipped into fear territory, dropping to 42 from 58 just a few days earlier.
Stablecoin market capitalization remained steady at around $145 billion, with USDT and USDC holding their places as the top stablecoins in terms of market cap. As traders brace for more volatility and await the upcoming Federal Open Market Committee (FOMC) announcement, the crypto landscape remains unsure and highly reactive.
