Why is crypto going down as the market cap plummets to $3.3Tn? Will crypto recover in 2025? Find out more about the crypto crash here.

The crypto market is turbulent as bulls hold on, attempting to soak in the deluge of selling pressure seen in the better part of this week. While confidence is high, there is not much for optimistic buyers. If anything, Bitcoin and top crypto assets are inches away from critical, multi-week support levels.

From the weekly chart, Bitcoin

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Price









Trading volume in 24h

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Last 7d price movement

has found strong support at $90,000 and is inside a bull flag. Overall, there is hope that prices will recover, breaking $100,000 and resuming the uptrend of Q1 2024. Any uptick will be the much-needed tailwind for Ethereum, Dogecoin, Solana, and top altcoins, already down double digits in the last trading week.

According to Coingecko, the total market cap is down nearly 4% to $3.3 trillion.

The drop seen this week is partly driven by strong economic data from the United States and the flush out in the crypto perpetual platforms. In Binance, Bybit, and OKX, billions worth of leverage positions have been liquidated.

From what’s visible in the markets, questions are beginning to emerge about whether Bitcoin and crypto will recover in the face of better-than-expected macroeconomic events.

Why Crypto Is Down? Everything to Know About Continued Crypto Crash

Earlier this week, the United States Bureau of Labor Statistics revealed more job openings by the close of November. By the end of November, there were 8.1 million open positions versus the projected 7.6 million. This figure points to a strong labor market, coming when there are concerns about a recession in the United States.

Later today, the Non-Farm Payrolls (NFP) results will be released. Economists expect the economy to create 160,000 jobs, down from the over 224,000. If the released data exceeds economists’ estimates, the USD could strengthen, pushing crypto prices even lower.

(Source)

A rallying greenback will trigger more long liquidations, as seen this week. According to Coinglass, over $336 million of positions have been closed in the last 24 hours. Specifically, $224 million worth of leverage longs on Binance, OKX, and Bybit were forcefully closed. Meanwhile, $111 million of shorts were liquidated.

(Source)

In total, more than 123,000 traders were liquidated.

Overall, the Federal Reserve continues prioritizing the labor market data as it develops its next monetary policy moves. If there is improvement and the economy continues to churn out more jobs, the probability of the central bank slashing rates aggressively will diminish. A hawkish stance, in turn, weighs heavily on speculative assets, pushing prices lower.

In this scenario, bond yields will also rise, forcing capital to treasuries, away from “risky” Bitcoin and crypto.

Will Bitcoin, Ethereum, and Altcoin Prices Recover?

Technical candlestick formations still favor buyers. As such, Bitcoin bulls could take over.

(BTCUSDT)

However, it is worth noting that during the current crypto downturn, central banks appear to be shifting away from rate-cutting regimes to holding steady or proposing even higher rates. For this reason, equities and crypto could see liquidity outflows, amplifying Bitcoin and altcoins’ vulnerabilities to macroeconomic shocks.

The good news is that Donald Trump is back in office, and his administration’s policies could support crypto. Trump, as seen during his campaigns, was more crypto-friendly.

At the same time, Gary Gensler, the chair of the Securities and Exchange Commission (SEC), is stepping down this month. The president-elect will replace him with a more crypto-friendly Paul Atkins.

His nomination could catalyze growth, allowing for the drafting of clearer crypto rules and reduced scrutiny.

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