New York, : Bitcoin suffered one of its steepest intraday declines of the quarter on Thursday, falling below $91,000 and wiping out $200 billion in global crypto market capitalization after the U.S. Federal Reserve signaled it may pause further rate cuts due to stubborn 3.2% inflation. The announcement triggered a broad-based sell-off across the digital asset sector, with DePIN (Decentralized Physical Infrastructure Networks) and AI tokens leading losses.
AI-driven tokens such as Render (RNDR) and several DePIN projects plunged 15–20%, while Ethereum hovered precariously above $3,300. Solana, which recently rallied on strong ecosystem growth, slipped 10% as traders braced for thin year-end liquidity and heightened volatility ahead of the December FOMC update.
Fed Policy, Market Psychology, and Macro Headwinds
Fed Chair Jerome Powell delivered a tone analysts described as “dovish but disappointing,” implying that while the Fed is open to easing in 2026, rate cuts are on pause for now. The market, which had priced in a more aggressive easing cycle, reacted sharply—especially across leveraged crypto positions.
Institutional sentiment also wavered after BlackRock CEO Larry Fink urged investors to treat Bitcoin ETFs as long-term hedges, rather than short-term speculative plays. Meanwhile, prominent trader @CryptoWhale forecast a potential Bitcoin rebound to $80K should rate cuts resume in Q1 2026, though warned of “extreme leverage unwinds” ahead.
Crypto Contagion Hits Global Markets
Asia followed the U.S. downturn, with Hong Kong’s spot Bitcoin ETFs recording $150 million in outflows, their largest since launch. Analysts at Matrixport warned that holiday-thin trading could exacerbate sharp directional moves, increasing the risk of cascading liquidations.
The downturn also coincided with concerning macro signals:
Tesla’s U.S. sales fell to 320,000 units,
The company posted an expected $2B loss in Q4,
BTC sales revenue from Tesla slipped to a three-year low despite discounted Model Y prices.
These macro correlations highlight a growing trend in which traditional equity weakness increasingly spills into crypto markets.
Regulatory and Structural Shifts Loom Large
Analysts say the crypto ecosystem is bracing for incoming regulatory clarity under President-elect Donald Trump, who has expressed pro-crypto views, but details remain vague. Overleveraged positions across derivatives platforms are now under scrutiny as traders attempt to de-risk ahead of 2026.
Despite the downturn, experts argue this volatility represents crypto’s growing maturity as a $3.5 trillion asset class entwined with global macro trends—from central bank policy to energy markets and tech sector performance.
A Market Searching for Stability
With the broader financial world preparing for major 2026 IPOs, including SpaceX’s much-anticipated listing, investors remain cautious but alert to potential buying opportunities.
For now, Bitcoin’s dip below $91K serves as a stark reminder that the crypto market remains highly sensitive to central bank signals—especially when inflation and liquidity concerns collide.
