Why the market dropped sharply today:
Pressure from the Fed and thin liquidity causing panic
The sharp decline of crypto today mainly stems from stronger-than-expected U.S. job data, pushing the probability of a Fed rate cut in December down to just 40% - from 90% at the beginning of November. This has led investors to withdraw funds from riskier assets like Bitcoin, resulting in a sell-off and the liquidation of 204 million USD in long positions within just one hour. Thin market liquidity at the end of the last weekend in November further amplified volatility, with stablecoins withdrawing 4.6 billion USD since the peak in October. Additionally, Bitcoin miners are struggling due to rising costs, forcing them to sell coins and putting pressure on supply. Fear sentiment (Fear & Greed Index at 10) is widespread, wiping out all of Bitcoin's 2025 gains (currently only up 2.8% YTD). Experts predict a recovery could happen if the Fed eases QT today.
