Following the crypto market crash on October 10, a bearish sentiment has dominated, with on-chain data indicating a continued decline in digital asset prices. Bitcoin (BTC), for instance, is nearing one of its worst weekly performances of the year, having recorded a 6% drop over the past seven days.
Taking a broader view, the market presents a mixed picture. Solana (SOL) has decreased by 20% year-to-date, while Chainlink (LINK) has suffered a 33% drop.
Although Bitcoin, XRP, and Ethereum (ETH) have seen some gains this year, they have not outperformed the stock market, which has risen by 14% during the same period.
Recent announcements from the Federal Reserve (Fed) indicate that it will cease quantitative tightening (QT) on December 1, accompanied by an interest rate cut. This change is expected to inject more liquidity into the crypto financial system.
They argue that although the environment in October felt bleak, the policy outlook suggests a more favorable climate moving forward. This makes it hard to predict a deep bear market in crypto at this juncture, although short-term weakness is likely to persist for some time.
He highlighted that, without new catalysts and amid ongoing concerns regarding security and regulation, mainstream participation in the market is likely to remain subdued.
He warned that if a selloff occurs in artificial intelligence and tech stocks, Bitcoin could potentially fall below the $100,000 threshold, with altcoins likely to experience even steeper declines.
When writing, Bitcoin managed to recover above the $103,000 mark. Yet, the leading crypto is still 18% below all-time high levels of $126,000 reached just days before the infamous market crash on October 10.
Featured image from DALL-E, chart from TradingView.com
