Good morning Asia, markets are painting a deep shade of red today.
Bitcoin slid to a five-month low on Wednesday, briefly breaking below $100,000 as investors reacted to the prolonged US government shutdown and fresh signs of slowing growth.
Ether led losses, falling more than 12% to $3,179. The drop leaves Bitcoin near its weakest level since May, roughly 20% below its early October peak above $126,000, as enthusiasm fades and liquidity thins.
Liquidations accelerated. About $2.09b of crypto positions were wiped out in the past 24 hours, CoinGlass data showed, including $1.68b from longs. The tally remains far below October’s record $19b washout, yet traders have turned more cautious since that rout.
Markus Thielen, CEO at 10X Research, told Cryptonews: “The issue today isn’t excessive futures leverage, it’s the long spot holders stepping back.”
“Powell’s signal that a December rate cut is not guaranteed removed a key pillar of confidence just as mega-whale selling began to outweigh whale buying, a dynamic that emerged immediately after the FOMC meeting,” he added.
Market snapshot
- Bitcoin: $101,464, down 4.8%
- Ether: $3,310, down 9%
- XRP: $2.22, down 5.3%
- Total crypto market cap: $3.45 trillion, down 4.8%
Altcoins Under Pressure as Bitcoin Dominance Climbs Above 60%
Market structure trends continue to favor Bitcoin over smaller tokens. Analyst Benjamin Cowen projected that altcoins could fall another 30% versus Bitcoin in coming weeks as investors crowd into the largest asset near the $100,000 level. Bitcoin dominance rose to 60.15% as risk appetite narrowed.
Elsewhere, US stocks finished sharply lower on Tuesday after big banks warned of a possible drawdown.
The S&P 500 and Nasdaq posted their largest one-day declines since Oct. 10, with tech weakness setting the tone as the market reassessed stretched valuations tied to the artificial intelligence boom.
Executives at Morgan Stanley and Goldman Sachs cautioned on bubble risks after a series of all-time highs for the S&P 500.
JPMorgan Chase chief executive Jamie Dimon earlier warned of a significant correction risk over the next six months to two years, citing geopolitical tensions.
Longest-Ever US Shutdown Freezes Data as Markets Search for Direction
The government shutdown, driven by a congressional impasse, is nearing a record at 36 days. With official statistics on hold, investors are leaning on private gauges such as the ADP National Employment Report due Wednesday, while parsing Federal Reserve commentary for policy signals in a data vacuum.
Sector moves were stark. Tech shares fell 2.3% to pace declines across the S&P 500’s 11 sectors, while financials led the gainers. Futures later pointed to a softer US open, adding to nerves.
Asia followed Wall Street lower. MSCI’s index of Asia-Pacific shares outside Japan fell 0.8%, dragged by a 4.1% slide in South Korea’s Kospi. US e-mini futures eased another 0.4% after the S&P 500’s 1.2% drop overnight.
Flows remained selective, with buyers stepping back on strength and bids thinning on weakness.
Traders Cite Trump’s China Rhetoric, Liquidity Strains, and Fed Doubts as Pressure Builds
Macro cross-currents kept pressure on crypto. Traders cited President Trump’s ongoing trade fights, including a recent threat against China that preceded October’s record liquidations, along with worries about liquidity and fading confidence in a possible third US rate cut in 2025.
Still, there are potential upside markers. Ryan Lee, chief analyst at Bitget, said Bitcoin could test $115,000 to $120,000 if macro signals improve, while Ether may rebound toward $4,200 on layer-2 scaling gains and a firmer DeFi backdrop.
“Key catalysts to monitor include upcoming Fed rate decisions, ongoing ETF inflows, and regulatory clarity from global bodies such as the SEC, all of which could accelerate mainstream integration,” he said.
“That said, geopolitical tensions and unexpected inflation prints remain key downside risks that could trigger abrupt pullbacks.”
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