Crypto slump deepens as Bitcoin falls under $97,000

WEB DESK: On Friday, Bitcoin (BTC) extended its decline, slipping below its previous close of $97,616.36. The cryptocurrency was seen trading at $96,881 within the first trading hour.

The downward trend intensified around 2:00 UTC when BTC dropped to $95,999.92. However, after 2:09 UTC, Bitcoin began to recover gradually, reaching a day high of $97,730.49 by 4:43 UTC.

Why is Crypto down?

Bitcoin, the largest cryptocurrency, was trading at $102,300 on December 19, while Ethereum (ETH) fell to $3,600. Among the major underperformers were coins like Cosmos, Floki, THORChain, Curve DAO Token, and Fantom.

The primary driver behind the recent crypto downturn was the Federal Reserve’s decision to cut interest rates by 0.25 per cent, in line with expectations. This marked the latest in a series of reductions, bringing the total rate cuts for the year to 1 per cent.

However, the Fed signaled only two more cuts in 2025, emphasizing its commitment to controlling inflation, which is expected to remain elevated. The central bank projects inflation will only reach its 2 per cent target in 2026 or 2027.

The Fed’s hawkish stance triggered a selloff in cryptocurrencies and other risk assets. US equity markets also slumped, with the Dow Jones and Nasdaq 100 indices both dropping over 2 per cent. Meanwhile, US Treasury yields hit multi-month highs, with the 10-year yield rising to 4.557 per cent and the 30-year yield reaching 4.7 per cent. The US dollar index surged to a two-year high.

Crypto is also experiencing pressure from profit-taking, panic selling, mean reversion, and the Wyckoff Method distribution. Historically, investors tend to take profits when Bitcoin and other tokens rally significantly.

Mean reversion occurs when an asset in an uptrend pulls back to align with its historical averages. For instance, Solana remains about 20 per cent above its 200-day moving average, suggesting it could decline to closer match that level.

Cryptocurrency prices frequently follow Bitcoin’s movements. Notably, Bitcoin’s cup-and-handle pattern hints at a potential rally to $122,000 in the near future, which could drive a broader recovery across altcoins.

However, any immediate gains following a dip could lead to a “dead cat bounce” — a brief recovery before resuming the downtrend.

Bitcoin’s latest price 

One Bitcoin in Pakistani rupee is Rs27,134,986.91

One Bitcoin in US dollar is $97,120

(Updated: 10:30 AM)

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