On Wednesday, the cryptocurrency markets experienced a slight decline after a strong rise the previous day, as Bitcoin briefly surpassed the $94,000 level before dropping to around $92,500 during Asian morning hours. This pullback revived buying positions in the market, but made the markets more susceptible to the upcoming decision from the US Federal Reserve that is expected to include a 25 basis point rate cut. This volatility comes at a sensitive time as investors await the tone of Federal Reserve Chair Jerome Powell in his final conference for 2025, which could determine the direction of monetary policy going forward.
#### Bitcoin performance: Rising volatility raises questions
Bitcoin started Tuesday with a notable rise, surpassing $94,000 for the first time in weeks, sparking a wave of optimism among individual investors. According to Santiment, a blockchain analytics firm, this rise triggered a return of the phenomenon known as "FOMO," or fear of missing out on investment opportunities, with expectations for higher prices reaching new levels. However, these sentiments quickly cooled as the price fell below $93,000 in late Asian trading, resulting in a decline of about 1-2% in the early hours of the next day.
The current price of Bitcoin is $92,682.63, representing an overall increase of 2.74% over the past 24 hours, but it shows sharp fluctuations. This rise in volatility is considered "classic," as actual Bitcoin volatility has exceeded expected volatility for the first time in several months. According to market history, this situation has occurred 8 times previously, and in 6 of those cases, it was associated with market bottoms and the beginning of recovery phases. Mark Philipshak, a research analyst at CF Benchmarks, states that "Bitcoin has recorded a classic rise in volatility, with actual volatility rising above expected for the first time in months." This suggests that the market may be in a transitional phase, but analyses confirm that the next major move will depend on the outcomes of the Fed meeting.
As for the CEO of Bitget, Gracy Chen, she pointed out that cryptocurrencies are more prone to volatility compared to traditional stocks, and that Bitcoin's consolidation in a range between $86,000 and $94,000 reflects a market that "lacks sufficient anchors for a decisive move." According to her, overall caution may lead the price to slide toward the mid-$80,000s if Bitcoin does not regain the $94,000-$96,000 levels after Powell's statements. Overall, the market seems to be in a fragile balance, as social momentum has temporarily boosted confidence, but the swift retreat reflects ongoing uncertainty.
#### Performance of alternative currencies: Mixed gains with slight declines
Alternative currencies have shown mixed performance, with strong gains in most of them over the past 24 hours, followed by slight declines in the early Asian morning hours due to profit-taking. For instance:
- Ethereum (ETH): Increased by 7% in the last 24 hours to trade around $3,320, extending the weekly gain to about 10%. Current price: $3,322.38, up 6.66%.
- Solana (SOL): Added over 5%, with a current price of $139.17, up 4.89%.
- Cardano (ADA): Outperformed with a daily jump of 8.5% and 6% weekly, with a current price of $0.4630, up 8.60%.
- Dogecoin (DOGE): Advanced by 5%, with a current price of $0.1467, up 4.69%.
- Ripple (XRP): Added only 2% in the last 24 hours and fell 4% weekly, with a current price of $2.0901, up 1.83%.
- Binance Coin (BNB): Almost stable, up 0.65%, with a price of $893.48.
- Tron (TRX): Slight increase of 0.39%, with a price of $0.2799.
As for smaller-cap currencies, their market depth has remained weak, reflecting uneven liquidity that has characterized trading in December so far. All of these currencies declined by 1-2% in the early hours of the day, indicating a natural corrective movement after the overnight rise.
#### Overall market context: Awaiting Fed decision and its global impact
This pullback came amid mixed trading in Asian stocks, as investors focus on clarifying the path of Federal Reserve policy. In global markets, Chinese stocks fell after data showed inflation rising in November, which reduced expectations for additional local monetary easing. Japanese stocks dipped slightly, while South Korea and Taiwan saw modest gains. Meanwhile, the silver rally extended to its highest record, while the U.S. dollar stabilized, reflecting a broader market uncertain if global central banks are comfortable easing financial conditions until 2026.
The Fed's decision now intersects with global stock sentiments and cryptocurrency flows, making the major market movement depend less on daily breakthroughs and more on what will follow Powell's statements. The Fed is expected to cut interest rates by 25 basis points, a decision that could boost confidence in the markets if the tone is positive or increase volatility if it signals further caution.
#### Additional price data
To complete, here are some other current prices in the market:
- Tether (USDT): $1.0000, up 0.01%.
- USD Coin (USDC): $0.9998, up 0.01%.
- Bitcoin Cash (BCH): $568.05, up 1.15%.
- Chainlink (LINK): $14.20, up 3.58%.
In conclusion, the market currently shows a balance between optimism stemming from recent rallies and caution ahead of major events, with the main focus on the Fed meeting that could determine the direction for the upcoming weeks. Investors are advised to be cautious, as volatility may continue until official statements are made.
