Crypto Price Analysis 12-20 BITCOIN: BTC, ETHEREUM: ETH, SOLANA: SOL, BITTENSOR: TAO, INTERNET COMPUTER: ICP, FILECOIN: FIL, COSMOS: ATOM

As a seasoned crypto enthusiast with years of experience under my belt, I must say that this week has been quite a rollercoaster ride for the digital assets market. I remember when I first started investing in cryptocurrencies back in 2017, and the excitement and anticipation that came with every price fluctuation were unparalleled.

After the remarks by Federal Reserve Chair Jerome Powell about potential slower rate cuts in 2025, Bitcoin (BTC) dropped below $100,000, spooking investors who then quickly sold off their assets, causing a significant market-wide selloff.

The Federal Reserve predicted that interest rates would decrease by just two instances in 2025, which is lower than the original forecast of four cuts. After this announcement, the price of Bitcoin dropped significantly and fell below $100,000 to reach a low of $95,875 before slightly rebounding.

Powell’s remarks sparked a sell-off in the cryptocurrency sector, causing all major digital currencies to drop. Currently, Bitcoin (BTC) is falling by more than 4% and stands at $97,829, with bears dominating the market. Meanwhile, Ethereum (ETH) has fallen over 8% and dipped below $3,500, as sellers aim for the $3,000 threshold. Solana (SOL) also plummeted by nearly 8%, giving up most of its gains post-election. Other coins like Dogecoin (DOGE), Cardano (ADA), Chainlink (LINK), Toncoin (TON), Polkadot (DOT), Uniswap (UNI), and Litecoin (LTC) also suffered significant losses.

Bitcoin (BTC) Plummets Following Fed’s Rate Cut Announcement

After the Federal Reserve announced a 25 basis point interest rate reduction, Bitcoin (BTC) experienced a steep fall, causing its price to dip below $100,000. This slide follows BTC setting a new record high just after the FOMC meeting, as markets became bearish. Despite the anticipated rate cut, Powell’s remarks suggested a slower pace for future reductions. He mentioned that future rate cuts in 2025 would be smaller due to past inflationary pressures. These comments from the Fed Chair created a sense of caution across markets, and cryptocurrencies quickly followed suit by registering a drop.

The Fed’s announcement triggered the liquidation of approximately $700 million in cryptocurrency derivative positions, a large portion of which were long positions in Bitcoin. On the other hand, altcoins experienced steep declines, with Ethereum (ETH) dropping below $3,500. Notable altcoins like Cardano (ADA), Litecoin (LTC), Dogecoin (DOGE), Chainlink (LINK), and many others also saw significant drops. As a result, the total market capitalization of cryptocurrencies has decreased by around 4% and now stands at $3.36 trillion.

Prices for cryptocurrencies had been on an upward trend following a period of growth, coinciding with Donald Trump’s win in the U.S. elections. This surge sparked optimism among investors, who anticipated a pro-crypto administration and clear regulations. Joel Kruger, a strategist at LMAX Group, commented on this situation.

With Bitcoin’s price reaching $100,000 and setting off a rally in the crypto market, there has been growing anticipation of a correction. However, an unexpected event in traditional markets, specifically the Federal Reserve’s decision on Wednesday, has triggered a response that we couldn’t overlook.

On the other hand, individuals such as Azeem Khan, co-founder of Morph, viewed the market’s recent slowdown as beneficial, given the rapid pace of its growth.

Taking a broader perspective over time, a dip like this seems normal and beneficial. It’s also important to mention that in previous years, investors often sell securities towards the end of the year to offset losses with gains, reducing their tax burdens. Although it’s difficult to pinpoint how much of this is influencing the current situation, it could potentially play a role.

Losses From Crypto Hacks Jump To $2.2 Billion

2024 saw a 21% jump in losses from significant cryptocurrency hacks, reaching an alarming $2.2 billion – marking the fourth consecutive year these losses have exceeded $1 billion. Additionally, the number of smaller hacks also rose from 282 in 2023 to 303 in 2024. As a crypto investor, I’m deeply concerned about this trend as reported by Chainalysis. With increasing crypto adoption, it seems we are likely to witness more cyber attacks in the market.

With the surge in the digital assets market, it’s no surprise to witness an increase in the misuse of cryptocurrencies simultaneously. Confronting this rise in criminal activities, particularly fraud, is likely to emerge as a significant hurdle for the industry in the coming year.

Significant hacking incidents have been reported, such as the theft of approximately $305 million from the Japanese cryptocurrency exchange DMM Bitcoin and around $230 million from WazirX.

El Salvador Strikes Deal With IMF

El Salvador has toned down its ambitions for Bitcoin and cryptocurrency in order to secure a $1.4 billion loan agreement with the International Monetary Fund (IMF). The IMF reported that the risks associated with El Salvador’s adoption of Bitcoin have decreased substantially since the country allowed businesses the choice to accept or not accept Bitcoin as payment. El Salvador was the first nation to make Bitcoin legal tender.

The dangers associated with the Bitcoin project are expected to decrease substantially, following our fund’s guidelines. Legislation will ensure that the adoption of Bitcoin by private entities is optional. In terms of public sector involvement, any economic actions or transactions involving Bitcoin, as well as purchases of Bitcoin, will be strictly limited.

The International Monetary Fund (IMF) has strongly criticized El Salvador’s move to recognize Bitcoin as legal tender, expressing concern that this decision might pose obstacles if the nation requires financial aid in the future.

Bitcoin (BTC) Price Analysis

After Jerome Powell’s comments suggesting fewer interest rate cuts, Bitcoin (BTC) experienced a significant drop. The Fed’s stance spooked investors, causing a widespread selloff in various asset classes. This led BTC to dip below $100,000, reaching a low of 95,630 before rebounding slightly. Over the past three days, Bitcoin has continued its downward trend due to escalating economic pressures. The market turmoil worsened following the Fed’s prediction of only two rate cuts in 2025 instead of the anticipated four. Additionally, the potential creation of a strategic Bitcoin reserve is adding to the asset’s price decline. Although President-elect Donald Trump had suggested such a reserve, it may encounter regulatory challenges.

BTC recovered from a substantial decline at the beginning of last week, rising over 4% on Wednesday to go above the 20-day SMA and settle at $100,900. However, buyers could not sustain momentum and the price dropped almost 1% on Thursday to settle at $99,923. BTC recovered on Friday to reclaim the $100,000 level and settle at $101,394 before registering a marginal decline on Saturday. However, bullish sentiment returned on Sunday as BTC rose almost 3% to go above $104,000 and settle at $104,181.

On Monday, investors maintained dominance while Bitcoin climbed to a peak of $107,464. Despite this, it couldn’t sustain the level and dropped to $105,746, marking a 1.50% growth. A new record high was reached on Tuesday when Bitcoin spiked to $108,268 before slightly dipping and ending at $106,142. However, the mood shifted dramatically on Wednesday as markets turned bearish, causing Bitcoin to plummet nearly 6%, reaching $100,189, barely clinging onto $100,000. The downward trend continued on Thursday when buyers couldn’t regain control, leading to a drop of 2.48% and falling below the 20-day SMA and $100,000 to close at $97,703. It hit an intraday low of $95,630 during this period. As of now, Bitcoin is slightly up, with buyers and sellers battling for control.

Ethereum (ETH) Price Analysis

The price of Ethereum (ETH) has fallen below the $3,500 threshold, continuing its downward trend due to panic selling by short-term investors. Meanwhile, long-term holders have stayed on the sidelines. A decrease in exchange reserves might suggest that this decline could be temporary. However, the fall is substantial, and there’s a possibility that ETH will plunge towards the $3,000 psychological level, potentially losing a large portion of its gains made post-election.

On Wednesday, ETH bounced back significantly after hitting a low of $3,521 the day before, gaining nearly 6% to surpass its 20-day Simple Moving Average and close at $3,834. On Thursday, buyers made an effort to push ETH above $4,000, with ETH reaching an intraday high of $3,988. Unfortunately, it failed to maintain this level and dipped to $3,882, resulting in a 1.26% increase. On Friday, buyers continued to hold the reins, causing ETH to slightly rise above $3,900 and close at $3,907. However, it slipped back on Saturday, losing almost 1% to close at $3,869.

Buyers returned to the market on Sunday as ETH registered an increase of 2.25% to go above $3,900 and settle at $3,956. ETH faced considerable volatility on Monday as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand, and ETH registered a marginal increase to settle at $3,985, still unable to go above the $4,000 mark. Sentiment changed on Tuesday as ETH dropped over 2% to $3,892. Bearish sentiment intensified on Wednesday as ETH went below the 20-day SMA after a drop of almost 7% and settled at $3,625. Buyers attempted a recovery on Thursday as ETH rose to an intraday high of $3,763. However, they lost momentum after reaching this level, allowing sellers to take control. As a result, ETH plummeted almost 6%, going below the $3,500 level and settling at $3,416. The current session sees ETH marginally down as sellers continue to lower the price.

If bulls don’t intervene to halt the fall, Ethereum (ETH) might slide down to $3,000. Conversely, if Ethereum manages to bounce back from its present position, it has the potential to regain the $3,500 mark.

Solana (SOL) Price Analysis

As an analyst, I find myself observing the downward trajectory of Solana (SOL). The altcoin dipped below the $200 mark on Thursday, reflecting a significant increase in bearish sentiment towards this asset. Despite a brief intraday high of $234 on Thursday, fueled by buyers seeking to capitalize on Wednesday’s momentum, SOL failed to surpass this level and eventually slid back to $227, resulting in a minor decline. The sellers maintained control on Friday, causing SOL to drop nearly 1% to $224. The bearish trend intensified on Saturday, with SOL falling to an intraday low of $215 before settling at $219, marking a more substantial decrease of 2.22%.

The price recovered on Sunday as SOL rebounded from the 50-day SMA, rising almost 2% to settle at $224. However, buyers could not build momentum, and SOL was back in the red on Monday, dropping by 3.55% and settling at $216. Tuesday saw an uptick in volatility as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand, pushing SOL up over 3% to $223. However, bearish sentiment returned on Wednesday as SOL dropped over 7% to go below the 20-day SMA and settle at $206. SOL fell below $200 on Thursday as it fell 6.15% to $193. The current session sees SOL firmly in the red, with the price down almost 2% and trading at $190.

Bittensor (TAO) Price Analysis

After hitting a high of $748 on December 6th, Bittensor’s TAO token has shown signs of a bearish trend, experiencing a significant price drop at the beginning of last week. By Friday, the token had plunged to an intraday low of $562 as the bearish sentiment grew stronger. The weekend saw further drops, with TAO registering a nearly 3% decline and settling at $561. However, it managed a small recovery on Sunday, increasing by 2.24% and closing the weekend at $573. This recovery was short-lived as market sentiment towards the asset deteriorated. The start of this week saw TAO opening bearishly, losing almost 6%, falling below the 50-day Simple Moving Average (SMA) and a crucial $550 level to $518.

As a researcher observing the market trends, I noted that TAO experienced a steady decline on Tuesday and Wednesday, dropping by 4.17% and 3.59% respectively, causing the price to dip below $500 and settle at $499. The bearish sentiment intensified on Thursday, with TAO plummeting over 10% to fall below $450 and close at $447.

Internet Computer (ICP) Price Analysis

After hitting a low of $10.85 last Tuesday, Internet Computer (ICP) experienced a recovery and surpassed its 20-day Simple Moving Average (SMA) by Thursday, reaching an intraday high of $14.18 before settling at $13.68. However, the cryptocurrency ended the week on a bearish trend, decreasing by 1.17% on Friday and nearly 5% on Saturday, falling below its 20-day SMA and closing at $12.87. On Sunday, ICP rebounded with a 2.33% increase to $13.17, just shy of regaining the 20-day SMA.

On Monday, ICP shifted towards a bearish trend as buyers struggled to maintain positions above the 20-day Simple Moving Average, causing a nearly 4% drop to $12.68. The bears held control on Tuesday, with ICP falling another 5% to $12.07. This bearish sentiment intensified, leading to an almost 8% drop on Wednesday to close at $11.11. Thursday saw a further decline as the price dropped below the 50-day SMA, settling at $10.15 after a nearly 9% fall. Attempts by buyers to push above the 50-day SMA were made during the current session, with ICP reaching an intraday high of $10.77. However, their efforts lost steam at this level, giving sellers the opportunity to push the price down. Currently, ICP is down almost 3% and trading at $9.88, having lost the significant $10 mark.

Filecoin (FIL) Price Analysis

As a researcher observing the cryptocurrency market, I’ve noticed that Filecoin (FIL) has been affected by the bearish sentiment this week following Bitcoin’s (BTC) dip below $100,000. Last week, FIL dipped below its 20-day Simple Moving Average (SMA) when it hit a low of $5.68. Since then, it’s been having a tough time regaining momentum, failing to reclaim crucial levels and consistently staying below the 20-day SMA. Heading into the weekend, FIL saw a nearly 5% drop to $6.42. However, it recovered slightly on Sunday with a 4.31% increase, reaching $6.70. On Monday, buyers attempted to push FIL above the 20-day SMA but were unsuccessful, causing FIL to slide 2.75% to $6.52.

On Tuesday, FIL declined by 3.65%, ending the day at $6.28. On Wednesday, there was a significant increase in bearish feelings as FIL plummeted nearly 10% and dipped below $6 to close at $5.66. Thursday saw FIL drop more than 10% and fall beneath its 50-day moving average, settling at $5.09. Currently, in this session, FIL is down over 5% as sellers aim to push it towards the 200-day SMA.

Cosmos (ATOM) Price Analysis

After experiencing a surge following the elections, Cosmos (ATOM)’s upward trend suddenly halted in early December, with bullish momentum waning as it reached $12.25. By the start of the previous week, ATOM plunged beneath its 20-day Simple Moving Average (SMA), hitting a low of $7.25 before rebounding to surpass $9 by Friday. However, despite this recovery, ATOM was unable to exceed its 20-day SMA and began falling again at the start of the current week, decreasing by 2.52% to $8.87. On Tuesday, sellers regained control, causing ATOM to drop nearly 4% to $8.53. A significant decline of 10.27% on Wednesday saw ATOM fall below $8, settling at $7.65.

On Thursday, pessimism about ATOM grew as it fell below its 50-day Simple Moving Average, ending the day at $6.81 – a decrease of nearly 11%. In the ongoing session, ATOM is clearly in the negative, dropping by 6.53%, and is currently being traded at $6.36.

2024-12-20 13:32