- The crypto market fell after the Federal Reserve cut interest rates by 25 basis points, a move mostly anticipated by traders.
- Bitcoin remains supported above $88,200 but faces resistance near $94,500.
- Altcoins continue to weaken, with many tokens losing over 8% against bitcoin.
- Derivatives data shows declining volatility expectations and a bearish bias in options markets.
- Some tokens like Monero showed gains amid overall market weakness.
The cryptocurrency market experienced a decline following the Federal Reserve‘s decision to lower interest rates by 25 basis points. Traders had largely priced in this rate cut ahead of the announcement, leading to rapid unwinding of long positions in the hours that followed. Currently, bitcoin holds support above $88,200 and trades around $90,350 as it attempts to break through resistance at $94,500.
In the altcoin sector, many tokens posted losses, with EthereumFi (ETHFI), Fetch.ai (FET), Cardano (ADA), and PUMP dropping more than 8% within 24 hours. The lack of liquidity, exacerbated by October’s liquidation events, has contributed to heightened volatility, especially for smaller tokens. For instance, ETHFI’s market depth near $500,000 means trades above this amount can move its price by more than 2%, despite a market capitalization near $480 million.
Derivatives markets reveal a decline in bitcoin’s implied volatility, with the 30-day annualized figure at 46.95%, the lowest since November 13. The volatility gap between ether and bitcoin has widened, indicating increased focus on Ethereum‘s native token. The VIX index, which measures stock market volatility, has also normalized after its November spike. On the Deribit exchange, risk reversals for both bitcoin and ether remain negative across various maturities, signaling a market preference for put options, or protection against price drops.
In futures trading, open interest in ADA has dropped by 10% in 24 hours, leading declines among major cryptocurrencies including bitcoin and ether. Several top tokens, excluding these two, have seen funding rates turn decisively negative, suggesting traders are heavily shorting these assets.
Among the few tokens defying the broad downturn is Monero (XMR), which increased by over 2%, benefiting from stronger demand in privacy-focused cryptocurrencies. The market continues to favor less speculative assets, as evidenced by CoinMarketCap’s altcoin season index lingering at 19 out of 100, significantly below September’s peak of 77, reflecting sustained investor preference for bitcoin and ether over altcoins.
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