Major cryptocurrencies experienced significant losses on Wednesday morning as investors sought to secure profits amid mounting questions about the Federal Reserve's upcoming monetary policy decision in December. Bitcoin dropped below $103,000, while other digital assets posted steeper declines. Bitcoin traded at $103,222 after falling 3% over the previous 24 hours, according to market data . Ethereum declined 4.7% to reach $3,434. XRP recorded a 5.3% drop to $2.40, while Solana saw the sharpest fall among major tokens, sliding 8.85% to $154.76. The leading cryptocurrency had briefly recovered from earlier monthly lows of approximately $101,500 to reach above $106,600 before the recent selloff began. Trading activity on Tuesday pushed prices below the $103,000 threshold to around $102,600. Technical Weakness Triggers Liquidations Market analysts pointed to multiple factors behind the sudden reversal. Vincent Liu, Chief Investment Officer at Kronos Research, highlighted the role of profit-taking behavior among investors. Bitcoin struggled to break through the resistance at $107,000, prompting long position holders to exit their trades. The failure to maintain momentum above key price levels led to cascading liquidations. Leveraged positions magnified the downward pressure as automated stop-loss orders were triggered across trading platforms. Liu noted that these forced sales accelerated the decline beyond what fundamental factors alone would suggest. A brief uptick in cryptocurrency prices had followed the U.S. Senate's approval of legislation to reopen the government. The resolution of the prolonged shutdown initially boosted risk appetite among traders . However, the positive sentiment proved short-lived as technical factors reasserted themselves. ”The macro relief rally faded fast,” Liu stated. He identified $100,000 as the next critical support level for Bitcoin. A breach of this psychological barrier could unleash additional selling pressure and increase market volatility. Federal Reserve Decision Creates Uncertainty The Federal Reserve's upcoming policy meeting has emerged as the primary catalyst for cryptocurrency market movements. Traders had initially expected another interest rate reduction in December. Lower rates typically benefit digital assets by reducing yields on traditional investments and encouraging capital flows into riskier assets. Fed Chair Jerome Powell recently tempered expectations about a December rate cut. His comments suggested that policymakers remain cautious about further monetary easing despite earlier indications. The shift in messaging caught some market participants off guard. New reporting revealed growing divisions within the Federal Reserve regarding the appropriate policy stance. Officials remain split on whether economic conditions warrant another reduction in borrowing costs at the December meeting. The lack of consensus has added to investor uncertainty. The CME Group's FedWatch Tool currently shows a 66.9% probability of a rate cut at the Fed's December 9-10 meeting. While this represents a majority expectation, it reflects less certainty than markets typically prefer when positioning for major policy shifts.
