Bitcoin drops to $86,000, crypto asset market sentiment is extremely panicked

Source: DecenterKorea Original Title: Bitcoin retreats below $86,000… Cryptocurrency stocks ‘plummet’[Decenter Market Watch] Original Link: https://www.decenter.kr/NewsView/2H1R3DSAFN/GZ03

Bitcoin(BTC) falls to the $86,000 level. Concerns over the slowdown in the US interest rate cuts intensify, and risk assets are under overall selling pressure.

According to data from global crypto asset market sites, BTC decreased by 2.43% from the previous day, quoted at $86,155.69. Ethereum(ETH) dropped 3.98% to $2,944.48. Binance Coin(BNB) fell 2.86% to $852.73, XRP declined 5.09% to $1.887, and Solana(SOL) dropped 3.04% to $126.14.

The domestic market also showed weakness. BTC decreased by 1.93% from the previous day, quoted at 1.2879 billion Korean Won. ETH fell 2.99% to 4.408 million Korean Won, XRP declined 2.55% to 2,823 Korean Won, and SOL dropped 3.03% to 188,700 Korean Won.

Stocks related to cryptocurrencies experienced declines exceeding spot prices. Several crypto companies’ stock prices fell significantly, with a leading compliant platform’s stock dropping over 6%.

Market analysis suggests that both stocks and digital assets are showing signs of fatigue. Risk assets are not entering a full risk-avoidance phase but are digesting macroeconomic uncertainties. Analysts point out that as long as there are no signs of forced liquidations or ongoing liquidity deterioration, market adjustments could be relatively orderly without chaos or collapse.

The main factor driving market volatility is the change in the Federal Reserve(Fed)'s monetary policy stance. Although the Fed cut the benchmark interest rate by 0.25 percentage points this month, it stated that it plans only one rate cut next year, showing a cautious attitude. This diverges from market expectations of three rate cuts annually.

Additionally, expectations of increased likelihood of rate hikes by the Bank of Japan(BOJ) are rising, raising concerns about global liquidity and yen arbitrage trading. Yen arbitrage involves borrowing yen at Japan’s low interest rates and investing in stocks, cryptocurrencies, and other assets. If Japanese interest rates rise, financing costs will increase, and exchange rate loss risks will expand, potentially leading to a capital outflow and increased volatility in global risk assets.

Crypto investment sentiment remains in a “extreme panic” state. The Fear & Greed Index has decreased by 5 points from the previous day to 16. The closer this index is to 0, the more depressed the investment sentiment; the closer to 100, the more overheated the market.