The crypto market has taken a significant hit today. Both Bitcoin and almost all altcoins are deep in the red, with Bitcoin (BTC) even reaching its lowest level in seven months. What is driving this sudden and widespread decline?

US news puts markets on edge

Yesterday, Bitcoin briefly fell below 89,000 dollars, but later in the evening the market received a positive boost thanks to better-than-expected quarterly results from AI chip manufacturer Nvidia. This brought a moment of relief, with BTC recovering towards 93,000 dollars.

However, the recovery was short-lived. Selling pressure returned throughout the day, and conditions deteriorated rapidly once the US stock markets opened at 15:30 Dutch time. At that moment, Bitcoin was still trading above 91,000 dollars; it has since dropped below 87,000 dollars, marking a decline of more than 5%.

What triggered the reversal?

Interestingly, US stocks opened strongly. But after about an hour, sentiment completely shifted. The real turning point came around 17:20, when the US Department of Commerce unexpectedly announced that both the October and November employment reports will not be released until 16 December. This news is more significant than it appears. It means that the Federal Reserve (the US central bank) will not receive any new labour market data before making its next interest rate decision on 11 December.
Analysts at The Kobeissi Letter described it as follows: “Markets absolutely do not like information asymmetry.” According to them, this announcement flipped market sentiment. Investors were already on edge due to earlier uncertainties, which caused the news to hit even harder. Expectations for an interest rate cut in December had already fallen sharply in recent weeks. With this data now missing, that likelihood becomes even smaller — weighing heavily on both equity and crypto markets.

Stock market sell-off drags crypto down

The reaction on the US stock exchanges was severe:

The S&P 500 fell by nearly 3% within an hour and a half

The Nasdaq 100 even lost almost 4%

In a very short period, trillions of dollars in market value evaporated. And because Bitcoin has been increasingly correlated with the technology sector, the crypto market followed almost immediately.

Can Bitcoin recover?

Bitcoin is now just as oversold as it was at the bottom of the bear market three years ago. The price has also reached a key support level on the weekly chart — an area where buyers have historically shown strong interest. This is therefore a crucial moment for the bulls. If this level holds, a recovery move may follow. But if it breaks, volatility could increase further in the coming days.

Outlook

The market is likely to remain tense until there is more clarity regarding US interest rate policy. Positive macroeconomic news could quickly improve sentiment, but until then, caution remains advisable.

Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. Always conduct your own research and consult a professional before making investment decisions.