The crypto market’s dip comes amid sentiment that a December rate cut from the Federal Reserve is growing less likely. Lower interest rates are typically a spur for crypto speculation.
The crypto sector has experienced a rough first half of November, continuing the downward trend which started during the flash crash of Oct. 10.
“This is clearly triggered by macro risk adjusting on the back of a more hawkish Fed stance and a vacuum in macro data of inflation and jobs,” said Jasper De Maere, desk strategist at Wintermute. “[The] probability of 25 basis points rate cuts in December dropped from 70% only three days ago to around 50% today, leading to a rebalancing of risk.”
The recent crypto boom has been spurred in large part by the favorable regulatory policies from President Donald Trump’s administration. But the last month has erased much of those winnings for the sector, and the darkness may linger, according to some analysts.
“The crypto market has set lower local lows, confirming the downward trend,” said Alex Kuptsikevich, chief market analyst at FxPro. “The bearish signal–the death cross–is already looming over the first cryptocurrency.”
