Crypto Price Analysis (12/20): Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Bittensor (TAO), Internet Computer (ICP), Filecoin (FIL), Cosmos (ATOM)

Bitcoin (BTC) fell below $100,000 after Federal Reserve Chair Jerome Powell's statements on halting rate cuts in 2025 spooked investors and triggered a massive selloff across asset classes.

The Federal Reserve has projected only two rate cuts for 2025, down from four initially. Following the announcement, BTC plummeted below $100,000, reaching a low of $95,875 before recovering modestly.

Powell's words sparked a slaughter in the cryptocurrency markets, with all significant cryptocurrencies down. Bitcoin is currently down more than 4% and trading at $97,829, with the bears firmly in control. Meanwhile, Ethereum (ETH) is down more than 8% and has fallen below $3,500, with sellers targeting the $3,000 level. Solana (SOL) fell over 8% as well, giving up virtually all of its post-election gains. Dogecoin (DOGE), Cardano (ADA), Chainlink (LINK), Toncoin (TON), Polkadot (DOT), Uniswap (UNI), and Litecoin (LTC) all saw significant losses.  

Bitcoin (BTC) Drops Sharply After Fed Announces Rate Cut

Bitcoin (BTC) fell sharply following the Federal Reserve's announcement of a rate cut, dropping below $100,000. The dip comes after Bitcoin reached a fresh all-time high when markets went pessimistic following the FOMC meeting. The 25 basis point interest rate drop was consistent with expectations. Powell's statements, however, suggested a slower pace of future reductions. Powell warned that rate cuts in 2025 will be less due to recent inflationary pressures, prompting a bearish attitude across markets, and cryptocurrencies fell nearly immediately.

Following the Fed's pronouncement, $700 million in crypto derivatives contracts were liquidated, with Bitcoin long holdings accounting for a sizable portion. Altcoins performed even worse, with Ethereum (ETH) falling below $3,500. Cardano (ADA), Litecoin (LTC), Dogecoin (DOGE), Chainlink (LINK), and several other popular altcoins also saw significant declines. The cryptocurrency market capitalization has fallen by over 4%, reaching $3.36 trillion.

The dip comes after cryptocurrency values skyrocketed following Donald Trump's victory in the US presidential election. Markets soared on expectations of a pro-crypto administration and clear regulatory standards. Joel Kruger, market strategist of the LMAX Group, commented,

"The cryptocurrency market has already been on pins and needles over the likelihood of a correction following Bitcoin's historic run above $100,000. We got that catalyst from the traditional markets. The consequences of Wednesday's Fed decision were too big to ignore."

However, some, like Morph's co-founder Azeem Khan, felt the pullback was healthy considering the market's growth. 

"When you look at the year-over-year growth, a retreat like this seems healthy. It's also worth remembering that year-end stock selloffs have traditionally occurred as investors offset losses against gains to reduce their tax liabilities. While it is difficult to determine how much of this is driving the current trend, it may be a contributing element."

Losses From Crypto Hacks Jump To $2.2 Billion 

Losses from significant cryptocurrency attacks increased by 21% to $2.2 billion in 2024, surpassing $1 billion for the fourth year. More minor hacks have grown from 282 in 2023 to 303 in 2024. According to Chainalysis, markets are expected to see cyberattacks as cryptocurrency adoption grows.  

"As the digital asset market grows, so does the criminal usage of cryptocurrency. Countering the spread of these crimes, particularly fraud will be a significant issue for the sector next year."

Some of the most prominent hacks include the loss of almost $305 million from Japanese cryptocurrency exchange DMM Bitcoin and more than $230 million from WazirX.

El Salvador Strikes Deal With IMF 

El Salvador has toned back its Bitcoin and cryptocurrency ambitions to reach a loan agreement with the International Monetary Fund (IMF) worth $1.4 billion. According to the IMF, the risks associated with El Salvador's acceptance of Bitcoin (BTC) have diminished dramatically since the country permitted businesses to choose whether or not to accept Bitcoin. El Salvador is the first country to use Bitcoin as legal money.

"Fund policies will greatly reduce the possible risks of the Bitcoin project. Legal measures will make Bitcoin acceptance in the private sector voluntary. The governmental sector's participation in Bitcoin-related economic activity, as well as Bitcoin transactions and purchases, will be limited."

The IMF has been harshly critical of El Salvador's move to grant BTC legal tender status, warning that it could pose a challenge if the country required financial help.

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) has plummeted following Fed Chair Jerome Powell's bullish statements about rate cuts. The Fed's position alarmed investors, prompting a selloff across asset classes. As a result, BTC dropped below $100,000, reaching a low of 95,630 before recovering to current levels. As macroeconomic pressures have increased, the world's largest cryptocurrency has fallen for the third day. The market selloff intensified as the Fed anticipated only two rate cuts in 2025, compared to previous expectations of four. The ambiguity surrounding the development of a strategic Bitcoin reserve also weighs on the asset price. President-elect Donald Trump has repeatedly mentioned the possibility of a Bitcoin reserve comparable to the country's strategic oil reserves. However, such an initiative will likely face regulatory hurdles. 

BTC recovered after a significant drop at the start of last week, climbing more than 4% on Wednesday to surpass the 20-day SMA and settle at $100,900. However, purchasers could not maintain momentum, and the price fell about 1% on Thursday to close at $99,923. BTC rallied on Friday, reclaiming the $100,000 milestone and closing at $101,394, before falling slightly on Saturday. However, optimistic mood resurfaced on Sunday, with BTC rising nearly 3% to surpass $104,000 before settling at $104,181.

Buyers maintained dominance on Monday as BTC hit an intraday high of $107,464. However, it could not keep this level and plummeted to $105,746, representing a 1.50% rise. Tuesday saw BTC achieve a new all-time high of $108,268 before falling slightly and ending at $106,142. Sentiment shifted dramatically on Wednesday as markets turned pessimistic. As a result, BTC dropped over 6% to $100,189, just holding onto $100,000. BTC continued to tumble on Thursday after buyers failed to rally, falling 2.48% below the 20-day SMA and $100,000 to end at $97,703, but not before reaching an intraday low of $95,630. In the current session, BTC is modestly up as buyers and sellers attempt to establish control.

Ethereum (ETH) Price Analysis

Ethereum (ETH) has fallen below $3,500 as short-term holders continue panic selling. However, long-term holders have remained inactive, and dropping exchange reserves may signal that the decline is only transitory. Nonetheless, the decrease is enormous, and ETH might fall to the psychological $3,000 level, wiping out a big portion of its post-election gains.

ETH recovered well on Wednesday after dropping to a low of $3,521 the day before, climbing nearly 6% to above the 20-day SMA and settling at $3,834. Buyers attempted a move above $4,000 on Thursday, with ETH reaching an intraday high of $3,988. However, it could not maintain this level and sank to $3,882, resulting in a 1.26% rise. Buyers maintained control on Friday when ETH exceeded $3,900 before settling at $3,907. However, it plummeted again on Saturday, down about 1% to $3,869.

Buyers returned to the market on Sunday, as ETH rose 2.25% to surpass $3,900 and ended at $3,956. ETH experienced significant volatility on Monday as buyers and sellers tried to maintain control. Buyers eventually prevailed, as ETH rose marginally to $3,985, remaining unable to break above the $4,000 barrier. On Tuesday, sentiment altered as ETH fell by more than 2% to $3,892. Bearish sentiment grew on Wednesday as ETH fell below the 20-day SMA after dropping about 7% and settling at $3,625. Buyers attempted a recovery on Thursday, with ETH reaching an intraday high of $3,763. They lost momentum after reaching this level, allowing sellers to gain control. As a result, ETH fell about 6%, dropping below $3,500 before finishing at $3,416. The current session finds ETH slightly lower as sellers continue decreasing prices.

If bulls fail to intervene and reverse the trend, ETH might fall to $3,000. On the other hand, if ETH recovers from its current level, it may retake the $3,500 level.

Solana (SOL) Price Analysis

Solana (SOL) has lost all of its post-election gains as it continues to fall. The altcoin fell below $200 on Thursday as sour sentiment around the asset grew significantly. SOL has not risen over the 20-day SMA, a dynamic resistance level. It reached an intraday high of $234 on Thursday, with buyers hoping to expand on Wednesday's gains. However, it could not rise beyond this level and sank to $227, resulting in a slight decline. Sellers maintained control on Friday, as SOL fell about 1% to $224. Bearish sentiment grew on Saturday, as SOL fell to an intraday low of $215 before finishing at $219, down 2.22%.

On Sunday, SOL recovered from the 50-day SMA, increasing by about 2%, to settle at $224. However, purchasers could not gain traction, and SOL returned to the red on Monday, down 3.55% to $216. Tuesday saw increased volatility as buyers and sellers tried to gain control. Buyers eventually grabbed the better hand, sending SOL up more than 3% to $223. However, bearish sentiment resurfaced on Wednesday, with SOL dropping almost 7% to end at $206, below the 20-day SMA. SOL dipped below $200 on Thursday, falling 6.15% to $193. SOL is trading at $190 today, down about 2% from the previous session.

Bittensor (TAO) Price Analysis

Bittensor (TAO) has turned bearish after reaching a high of $748 on December 6, with prices plunging significantly at the start of the previous week. By Friday, TAO had fallen to an intraday low of $562 as bearish sentiment grew significantly. The price dropped over the weekend, with TAO down nearly 3% to $561.It recovered on Sunday, rising 2.24% and closing the weekend at $573. However, this is when market sentiment for the asset deteriorated. TAO began this week on a bearish note, falling over 6% to $518, below the 50-day SMA and the crucial $550 barrier.

TAO declined by 4.17% and 3.59%, dropping below $500 and settling at $499. The bearish feeling grew on Thursday when TAO fell more than 10% to below $450 and finished at $447. Buyers sought to recoup throughout the current session, with TAO reaching an intraday high of $469. However, sellers have retaken control, and TAO is now down over 3%, trading around $433. If sellers maintain control, TAO may fall to $400, where it could find support.

Internet Computer (ICP) Price Analysis

Internet Computer (ICP) recovered after reaching an intraday low of $10.85 on Tuesday. By Thursday, it had risen over the 20-day SMA, reaching an intraday high of $14.18 before settling at $13.68. However, it entered the weekend on a bearish note, falling 1.17% on Friday and nearly 5% on Saturday to close at $12.87, below the 20-day SMA. The price recovered on Sunday, with ICP rising 2.33% to $13.17, just shy of crossing the 20-day SMA.

ICP turned negative on Monday when buyers failed to stay above the 20-day SMA, falling over 4% and ending at $12.68. Sellers maintained control on Tuesday, as ICP fell about 5% to $12.07. Bearish sentiment increased significantly from here, as ICP slid about 8% on Wednesday to close at $11.11. Thursday, the price fell below the 50-day SMA, settling at $10.15 after losing roughly 9%. Buyers attempted to break over the 50-day SMA during the current session, with ICP reaching an intraday high of $10.77. However, they lost impetus at this point, allowing merchants to cut their prices. ICP is currently down nearly 3% and trading at $9.88, having missed the critical $10 milestone.

Filecoin (FIL) Price Analysis

Filecoin (FIL) has also lost momentum this week as markets turned pessimistic following Bitcoin's (BTC) dip below $100,000. FIL dipped below the 20-day SMA last week, hitting a low of $5.68. Since then, it has struggled to gain traction, retake critical levels, and break above the 20-day SMA. FIL began the weekend gloomily, down nearly 5% to $6.42. It recovered on Sunday, increasing by 4.31% to $6.70. Buyers sought to break over the 20-day SMA on Monday but were unable, as FIL fell 2.75% to $6.52.

FIL lost 3.65% to $6.28. Bearish sentiment increased significantly on Wednesday, with FIL falling nearly 10% to below $6 and eventually settling at $5.66. On Thursday, FIL fell below the 50-day SMA, dropping by more than 10% to $5.09. In the current session, FIL is down a little more than 5% as sellers attempt to drive it towards the 200-day SMA.

Cosmos (ATOM) Price Analysis

Cosmos' (ATOM) post-election surge came to a sudden halt in the first week of December, with bulls losing pace after reaching $12.25. ATOM dipped below the 20-day SMA at the beginning of the week, reaching a low of $7.25 before recovering above $9 on Friday. Despite a solid recovery, ATOM could not break above the 20-day SMA and dropped back into the red at the start of the current week, losing 2.52% and closing at $8.87. Sellers maintained control on Tuesday, as ATOM fell nearly 4% to $8.53. On Wednesday, ATOM fell below $8 and settled at $7.65, representing a 10.27% decline.

Bearish sentiment grew on Thursday as ATOM fell below the 50-day SMA and finished at $6.81, a nearly 11% decline. ATOM is currently down 6.53% and trading at $6.36.