Overnight crypto gains evaporated again by US morning hours like bitcoin fell back below $102,000 on Wednesday.
Just above $105,000 earlier today, the biggest crypto fell 3% in just a few hours as US traditional markets opened. It wasn’t just bitcoin; ether fell nearly 5% below $3,400 in the same period, while Solana , and other altcoin majors suffered similar declines.
Crypto-related US stocks are also taking a beating in the early session. USDC stablecoin issuer Circle (CRCL) fell 9.5% after its third-quarter earnings, while cryptominers with data center ambitions including Bitfarms (BITF), Bitdeer (BTDR), Cipher Mining (CIFR), Hive Digital (HIVE), Hut 8 (HUT), and IREN continued to sell off, down 5%-10%.
Weak US appetite for bitcoin
Weak price action during US trading hours has been a staple for the past few weeks now in crypto markets. The weak US investor appetite shows the so-called Coinbase Premium, a popular gauge of US investor demand, which has been negative since the end of October.
Coinbase Premium measures the price difference for spot BTC on Coinbase, widely used crypto exchange by US clients and many institutional market participants, compared to prices on Binance, the leading exchange by trading volume popular with offshore retail users.
It is the metric’s longest negative streak since March-April, when BTC fell to $75,000 from over $100,000 in a market-wide correction.
The Fed shared on interest rate cuts
The shift in US sentiment coincides with growing uncertainty about the Federal Reserve’s next move since the central bank’s October meeting. What before the meeting had been assumed to be a straightforward path to another interest rate cut in December has now turned into an internal battle among politicians.
According to a recent Wall Street Journal report, the central bank is facing an internal rift, with policymakers divided over whether the biggest risk now is persistent inflation or a softer labor market. This split has left the path to a rate cut in December far less clear than it appeared just weeks ago.
The recent government shutdown, which temporarily froze key employment and inflation numbers, has only widened that divide by forcing policymakers to lean on private data and anecdotes, the report said.
A December cut is now a “tossup,” the report said, and even the decision to cut rates could come with guidance on a higher bar for further reductions.
Since the Fed’s October meeting, US-listed spot bitcoin ETFs have seen more than $1.8 billion in net outflows, indicating that uncertainty surrounding Fed action and the lack of clear positive catalysts are keeping BTC on edge.
