Bitcoin recently experienced a $2,650 drop after failing to surpass $92,250 on Monday. This decline coincided with a downturn in the US stock market, driven by uncertainties in the job market and concerns over high valuations in artificial intelligence investments. Traders are now focused on the upcoming US Federal Reserve monetary policy decision, though the potential for Bitcoin to quickly reach $100,000 hinges on changing risk perceptions.
The monthly futures premium for Bitcoin related to spot prices has been under 5% for the last two weeks, reflecting the cryptocurrency's 28% decrease since its peak in October. Global economic growth concerns have also impacted market sentiment. The delay in official US employment and inflation data, due to a 43-day funding shutdown that concluded in November, has further clouded economic visibility. Consequently, anticipation of a 0.25% interest rate reduction in December hasn't spurred optimism, particularly after a private report highlighted 71,321 layoffs in November.
Additional strain on the market comes from the US real estate sector. Data from Redfin showed that 15% of home purchase agreements were canceled in October, attributing this to high housing costs and increased economic uncertainty. CNBC reported a 38% increase in delistings from October 2024, with November's median list price dropping 0.4% compared to the previous year.
Bitcoin's decline to $90,000 was exacerbated by the significant liquidation of $92 million in bullish leveraged BTC futures. Despite this, the S&P 500 index remains close to its all-time high, just 1.2% below it. Deribit data indicates that whales and market makers are requesting a 13% premium to sell Bitcoin put options, a sign typical of bearish markets. However, the rejection at $92,000 didn't alter traders' positions, reinforcing the $90,000 support level.
In China, stablecoins have been trading below parity with the local currency, as traders retreat from the cryptocurrency market. This risk-off trend suggests a short-term bearish outlook for Bitcoin, although it doesn’t necessarily indicate an expectation for prices to drop below $85,000.
Under normal conditions, Tether (USDT) should trade at a slight premium against the official USD rate to account for cross-border and regulatory challenges. A discount points to a strong desire to exit cryptocurrency markets, a common pattern during bearish periods.
The absence of significant inflows into US spot Bitcoin exchange-traded funds (ETFs) recently has also dampened demand for bullish leverage. Bitcoin's likelihood of reaching $100,000 soon is largely dependent on clearer insights into the US job and real estate markets, which might take longer to clarify than a single Fed decision.