#DecemberMarketOutlook #DecemberRateCutForecast

Why Did Cryptocurrencies Fall? Will Bitcoin and Altcoins Rise in December?

The cryptocurrency market is experiencing a sharp decline due to the liquidation of highly leveraged positions and increasing risk-off sentiment; however, historical precedents and the upcoming Fed rate cut leave the possibility of a recovery in December on the table.

Following the sell-off in November, Bitcoin (BTC) and major altcoins started December weakly. Bitcoin struggled to recapture the $95,000 level, while leading cryptocurrencies like Ethereum, XRP, Dogecoin, and Shiba Inu experienced 5-7% pullbacks. As the total market capitalization fell from $3 trillion to below $2.93 trillion, the question on market participants' minds remains: "How long will this decline last? Will a recovery occur in December?"
The factor increasing the selling pressure in the market is the liquidation of leveraged positions. As the total amount of liquidation in the crypto market has recently approached the $800 million-$1 billion range, positions held by market participants, particularly those anticipating short-term gains, have been liquidated in a chain reaction. The fact that the Crypto Fear and Greed Index remains between 16 and 20, in other words, in the "fear" and "extreme fear" zones, also indicates the weakness of risk appetite.

On the macro side, a general risk-off mode is evident in global markets, creating another wave of FUD surrounding the institutional Bitcoin story. On the altcoin side, liquidity remains weak, and "altcoin season" indicators indicate a lack of significant capital inflow.
Despite this overall picture, some data points to the possibility of a reactionary rally in December. Firstly, the decline in market sentiment into extreme fear is interpreted as a signal historically seen before major rallies. On the technical side, Bitcoin price is managing to stay above the $80,000 support level, and the possibility of a double bottom formation forming above this area is being discussed.

Meanwhile, markets are focused on the Fed's interest rate cut expected on December 15th and the official end of quantitative tightening. A pullback in interest rates to the 3.50%-3.75% range and the easing of liquidity conditions could be supportive for Bitcoin and altcoin prices in the medium to long term.