Introduction
The cryptocurrency market faced a severe downturn this weekend as Bitcoin failed to maintain its position above $92,000, tumbling below the critical $90,000 support level. This sharp decline, triggered by the release of U.S. inflation data, dragged the vast majority of altcoins into the red and resulted in over half a billion dollars in liquidations. With Bitcoin’s market capitalization dropping to $1.8 trillion and the total crypto market shedding $60 billion, the sell-off underscores the persistent volatility and macroeconomic sensitivity of digital assets.
Key Points
- Bitcoin fell below $90,000 after failing to break $94,000 resistance, triggered by US inflation data release.
- The market downturn caused $500 million in liquidations and reduced total crypto market cap by $60 billion.
- Altcoins suffered widespread losses, with ZEC and CC dropping by double digits while Bitcoin dominance held above 57%.
Bitcoin's Volatile Week Culminates in Sharp Rejection
Bitcoin’s attempt to start December on a positive note was swiftly undone by bearish pressure. After recovering from a November crash to trade above $91,000, the asset faced a violent rejection early in the week, plummeting to just under $84,000 in a matter of hours. A rapid bounce-back saw it reclaim the $90,000 mark by Tuesday, and subsequent climbs even challenged the $94,000 resistance level on multiple occasions. However, this key resistance proved insurmountable.
The decisive blow came on Friday with the publication of the U.S. Personal Consumption Expenditures (PCE) and Core PCE data, key inflation metrics closely watched by the Federal Reserve. The data spooked the market, prompting a rapid sell-off that drove Bitcoin’s price down to $88,000 in minutes. This move triggered massive liquidations, wiping out over $500 million in leveraged positions across the market. As of the latest data, Bitcoin struggles to regain the $90,000 level, with its market dominance over alternative cryptocurrencies remaining firm above 57% on CoinGecko.
Altcoin Market Suffers Widespread Losses
The sell-off was not contained to Bitcoin. The broader altcoin market experienced significant bleeding, with nearly all major cryptocurrencies posting losses. Ethereum, the second-largest digital asset, declined by 3.4%, trading just above the psychologically important $3,000 level. XRP faced a 2% drop, bringing it perilously close to breaking below $2.00.
The downturn was widespread across market capitalizations. Solana (SOL), Cardano (ADA), Chainlink (LINK), and Dogecoin (DOGE) all registered losses of up to 5%. The pain was more acute for assets like Sui (SUI), Ethena (ENA), Pepe (PEPE), Uniswap (UNI), and Polkadot (DOT), which saw declines between 6% and 7%. The most severe losses, however, were reserved for Zcash (ZEC) and the token labeled CC, both of which plummeted by double-digit percentages. In a sea of red, Bitcoin Cash (BCH) and Tron (TRX) managed to post minor gains, offering scant relief.
Market Implications and the Road Ahead
The collective damage from Friday’s sell-off is starkly visible in the total cryptocurrency market capitalization, which fell by approximately $60 billion in a single day to stand at $3.130 trillion. This event highlights the market’s continued fragility and its acute sensitivity to traditional macroeconomic indicators like inflation data. The rapid price action and subsequent liquidations serve as a reminder of the leveraged nature of crypto trading, where volatility can be dramatically amplified.
With Bitcoin’s dominance holding steady above 57%, the episode reinforces its role as the market’s primary benchmark and liquidity anchor. The failure to break the $94,000 resistance level, followed by the breakdown of $90,000 support, establishes a new, lower trading range that the market must now navigate. Investors and traders will be closely watching for Bitcoin’s ability to consolidate and potentially reclaim the $90,000 level in the coming days, as its performance will likely continue to dictate sentiment across the altcoin spectrum. The weekend watch has turned into a cautionary tale of crypto’s inherent volatility when confronted with macroeconomic headwinds.
📎 Related coverage from: cryptopotato.com