Crypto prices are crashing today, Dec. 1, as last week’s recovery fades and as investors react to numerous negative headlines from the U.S.
Summary
- The crypto market is crashing today amid key negative headlines.
- Liquidations soared by 440% on Monday to $781 million.
- Some potential catalysts may boost prices in the near term.
Crypto crashing today amid negative headlines
Bitcoin (BTC) and most altcoins are crashing today as many bulls who were betting on a rebound get wiped out. Total liquidations rose by 440% in the last 24 hours to over $781 million. Bitcoin liquidations rose to over $311 million in the last 24 hours, while Ethereum coins worth $167 million were wiped out.
Soaring liquidations have an impact on the crypto market as they close existing trades, leading to selling pressure. Still, these liquidations pale in comparison to those that happened on October 10, when trades worth over $20 billion were liquidated within a day.
The crypto market is also going down after a series of negative headlines. For example, S&P Global downgraded Tether, the most popular stablecoin in the crypto industry. It warned of a potential asset mismatch over time. Arthur Hayes, the founder of BitMEX, also warned on the risk Tether faces as it bets on low interest rates.
Meanwhile, Strategy’s CEO warned that the company may be forced to sell its Bitcoins if the enterprise value mNAV multiple drops into negative territory. Such a move would be a big one, as the company has spent the last five years accumulating Bitcoins.
Bitcoin and altcoins are falling amid the ongoing ETF outflows. Spot BTC outflows soared to over $3.5 billion in November, while Ethereum funds suffered the first outflow in months.
Will the crypto market recover in December?
A few catalysts may help to boost crypto prices in he near term. First, Polymarket data shows that the odds of the Federal Reserve cutting interest rates in December have soared to almost 90%.
Also, the odds that Trump will nominate Kevin Hassett as the Fed Chair have risen in the past few days. Hassett has expressed support for the crypto industry and lower interest rates.
Second, the crypto market may recover if Bitcoin price forms a double-bottom pattern. The daily chart shows it is slowly creating a double bottom at $80,494 and a neckline at $93,185, its highest point on November 28. This pattern often leads to a bullish reversal.
BTC price chart | Source: crypto.newsThird, the crypto market may recover now that the Fear and Greed Index has moved to the extreme fear zone of below 20. That is a sign that a new crypto bull run may be about to start, as it did in April.
Additionally, the market may react to the potential Santa Claus rally, a period when assets tend to rebound ahead of Christmas.
Source: https://crypto.news/why-is-crypto-crashing-today-will-it-recover-december/
