Crypto markets disappointed bullish investors once again on Thursday, as sharp early gains were swiftly overturned within a matter of hours.
Unlike the rapid reversals seen in just minutes yesterday, today’s pullback unfolded over several hours but was nearly as significant. Bitcoin (BTC) dropped from a peak of $89,300 down to around $85,500 before stabilizing near $86,000 at the time of writing—a decline of 0.8% over the last 24 hours. Meanwhile, the Nasdaq index retreated about 2% from its session highs but still ended up with a solid gain of 1.7%.
The initial surge was fueled by November’s U.S. Consumer Price Index report showing inflation cooling more than expected—from 3% down to 2.7%. This led some analysts to speculate that the Federal Reserve might consider cutting interest rates in January, which would typically boost risk assets like cryptocurrencies.
However, critics quickly questioned these inflation figures due to unusual data points. Economist Omair Sharif highlighted that rent and owner’s equivalent rent (OER) were recorded as zero for October—a statistical anomaly that could artificially suppress year-over-year CPI numbers until April unless corrected by the Bureau of Labor Statistics (BLS).
Nick Timiraos from The Wall Street Journal condemned this approach as “totally inexcusable,” emphasizing there was no justification for assuming zero rent/OER values for October.
Currently, market sentiment seems aligned with these doubts; expectations for a January rate cut remain low at roughly a 24% probability and have not shifted significantly since before the report.
Bitcoin consolidates while Ethereum traders hedge
The crypto options market reveals contrasting strategies between bitcoin and ether (ETH). According to Wintermute data, bitcoin options activity suggests traders anticipate price stability within a defined range—selling downside protection below $85,000 while limiting upside exposure above $100,000.
This behavior indicates confidence that support levels will hold steady without expecting any major breakout soon,” noted Wintermute’s OTC trading desk in their latest commentary.
Conversely, ether options show less certainty and more protective hedging: although support is forming between $2,700 and $2,800 levels; call options above $3,100 are being sold aggressively—implying traders are cautious about potential upward moves and prefer downside protection instead.
Crypto markets disappointed bullish investors once again on Thursday, as sharp early gains were swiftly overturned within a matter of hours.
Unlike the rapid reversals seen in just minutes yesterday, today’s pullback unfolded over several hours but was nearly as significant. Bitcoin (BTC) dropped from a peak of $89,300 down to around $85,500 before stabilizing near $86,000 at the time of writing—a decline of 0.8% overthe last ...