Crypto Giants Take a Backseat: What's Shaking Up Bitcoin and Ethereum?

Bitcoin and Ethereum are not doing so well. They are not just falling behind stocks but also other smaller cryptocurrencies. This is unusual and shows that the market is reacting to big economic news rather than what's happening inside the crypto world. New research shows that the recent drop in crypto prices wasn't because of problems within the crypto market. Instead, it was caused by changes in expectations about interest rates. When the head of the U. S. Federal Reserve, Jerome Powell, changed his tone, the chances of a rate cut in December dropped quickly. This caused a sell-off in risky assets, and crypto, which is highly leveraged, was hit hard. Almost all sectors in crypto saw losses. The overall market index fell by about 12%, while sectors like AI, DePIN, Gaming, and Meme coins dropped even more, between 14% and 18%. The research suggests that the market is still in a tough spot and won't improve until Bitcoin can recover its recent highs. Right now, crypto prices are moving based on expectations about monetary policy rather than anything happening within the crypto space. The next big move in the market will likely come from changes in interest rates, not from crypto itself. Bitcoin recently fell below $100, 000 for the first time since May. This drop was not due to any specific problem in the crypto world but was instead driven by broader economic factors. Despite this, the overall economic environment is still supportive of crypto. Japan is launching a big stimulus package, China is easing monetary policy, and the U. S. is ending its quantitative tightening. There are also talks of new stimulus checks in the U. S. , which could help the market recover.