On Wednesday, Bitcoin (BTC), the world’s leading cryptocurrency price, retraced to the $96,000 range. Notably, the fall in price marks a 15% drop from its all-time high of $108,000, reached in December 2024. Several other altcoins also see price corrections as the overall Market Fear & Greed Index stood at 54 (Neutral) out of 100, per CoinMarketCap data.
Crypto Market Responds to Inflation
Ether plummeted 7% over the past 24 hours to trade at $3,355. Similarly, Dogecoin (DOGE) and Avalanche (AVAX) dropped over 10% in the past 24 hours. This development occurred in response to macroeconomic reactions to the US Job Openings and Labor Turnover Survey (JOLTS) data.
According to reports from CoinGlass, this sudden price drop led to a massive liquidation of approximately $300 million in long positions across derivatives markets.
This significant leverage flush happens to be the first of the year, catching investors who bet on rising prices off guard. The downturn in crypto markets is part of a broader decline across assets, including stocks, driven by growing concerns over sustained inflation.
US stocks also declined, with the Nasdaq plummeting over 1% and the S&P 500 slipping 0.4% in late morning trading, as indicated by ISM data.
Market Sentiment Remains Optimistic
Although prices have declined in the last 24 hours, market sentiments remain overwhelmingly positive. Analysts predict Ethereum’s price could soar to unprecedented heights. Some forecasts suggest it could reach a remarkable $12,000 by the end of 2025.
Meanwhile, the success of Ethereum’s prospects hinges on two critical factors. First, the seamless deployment of its upcoming Pectra upgrade and a favorable regulatory environment, particularly under Donald Trump’s presidency.
Moreover, long-term holders’ confidence in Ethereum increased, with the percentage of investors holding their tokens for over a year increasing from 59% in January 2024 to 75% by December 2024.
This contrasts with Bitcoin, which saw a decline in long-term holders over the same period, reflecting growing optimism about Ethereum’s prospects. However, other experts are more conservative, with predictions ranging from $5,418.74 to $6,224.22
As the crypto industry gears up for this anticipated acceleration, Fidelity Digital Assets’ researchers assured investors that it is not too late to join the digital asset revolution. They described the current phase as the “dawn of a new era,” likely to span years, if not decades.
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