The cryptocurrency market faces a volatile week as Bitcoin's price slid below $94,000, its lowest level since May 2025. This decline extends a broader market sell-off, erasing roughly 25% of Bitcoin's gains since its October peak near $126,000. Analysts attribute the slide to a combination of factors including softer demand, significant sell-offs from long-term holders, and persistent outflows from Bitcoin ETFs.
The market sentiment remains deeply negative, with the Crypto Fear & Greed Index stuck in "extreme fear," contributing to heightened volatility. Bernstein analysts note that part of the decline is a "self-fulfilling prophecy" tied to Bitcoin's typical 4-year cycle following the April 2024 halving, where traders anticipate and act on expected weakness.
This crypto downturn coincides with a pivotal week for traditional finance. The Federal Reserve is widely expected to announce a 0.25% interest rate cut at its final 2025 meeting on Wednesday, bringing the target range to 3.5%-3.75%. This would mark the Fed's third consecutive rate reduction. Market pricing currently shows an 87% probability of this cut, driven by labor market concerns despite inflation remaining above the central bank's target.
Fed Chair Jerome Powell's post-announcement press conference will be closely watched for guidance on monetary policy into early 2026. The decision is being made without complete economic data due to a recent government shutdown, adding uncertainty.
Meanwhile, major tech earnings from Oracle, Adobe, and Broadcom will provide insights into AI infrastructure spending—a sector closely watched for its economic implications. In a notable market move, Alphabet's stock soared nearly 6% to a record high after Berkshire Hathaway disclosed a $4.9 billion stake, signaling strong institutional confidence in tech and AI growth narratives. Conversely, Nvidia's stock saw slight pressure after Peter Thiel's hedge fund sold its entire position worth nearly $100 million ahead of the company's earnings report.
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