Bitcoin and top altcoins suffered a harsh reversal today, Dec. 11, as concerns about the Federal Reserve forward guidance resumed. BTC dropped below $90,000, erasing some of the gains made earlier this week.
XRP price dropped by 3.6% in the last 24 hours and by 7.8% in the previous seven days. Similarly, Solana, Dogecoin, Cardano, and Chainlink prices were down by over 3% in the last 24 hours.
The closely-watched CoinMarketCap 20 Index, which is made up of the biggest coins in the crypto industry, dropped by 3%. Also, the market capitalization of all coins dropped by 2.64% to ~$3.02 trillion.
Altcoins dropped as investors sold the news
The main reason why Bitcoin and altcoins like Solana, Dogecoin, XRP, Cardano, and Chainlink are going down is the Federal Reserve interest rate decision, which happened on Wednesday.
The decision had two main catalysts for the crypto market, including the rate cut itself and the return to quantitative easing (QE) policies.
On QE, the bank will start buying short-term government bonds worth $40 billion a month, a move that will lead to more liquidity in the market.
However, the bank’s dot plot pointed to just one interest rate cut in 2026, which was lower than what analysts were expecting.
On the positive side, the dot plot will likely change next year since the composition of the Fed will change. Indeed, Donald Trump is interviewing candidates for the Fed Chair role this week, with most analysts favoring Kevin Hassett. Hassett has insisted that rates needs to go down substantially.
Bitcoin and most altcoins were up earlier this week as investors waited for the upcoming Fed rate decision. Therefore, the decline is happening as investors sell the news.
Altcoin Season Index is falling
Top altcoins like XRP, Solana, Dogecoin, Cardano, and Chainlink are dropping today as demand for these tokens wanes.
Data compiled by CoinMarketCap shows that the Altcoin Season Index has been in a freefall in the past few months. It has dropped to the year-to-date low of 17, much lower than the year-to-date high of over 60.
The index has dropped as most altcoins have plunged, with the top laggards being DoubleZero, Story, MYX Finance, Pudgy Penguins, Celestia, Ethena, Worldcoin, and Pyth Network. All these tokens have plunged by over 62% in the last 90 days, erasing billions of dollars in value.
The performance is a sign that investors are favoring Bitcoin, while demand for altcoins has tumbled in the past few months.
Soaring liquidations continue
Bitcoin and altcoins like Solana and Cardano are also falling as liquidations jump. Data compiled by CoinGlass shows that Bitcoin positions worth over $175 million were liquidated in the last 24 hours.
Ethereum positions worth over $170 million were liquidated, while Solana positions worth over $25 million were wiped out. Some of the other top liquidated tokens were XRP, Dogecoin, Chainlink, and Zcash.
Liquidations happen when crypto exchanges like Binance, Bybit, Hyperliquid, OKX, and Gate are forced to close leveraged positions when they move to a certain level in a bid to protect their margins.
In line with this, Bitcoin and most altcoins dropped as the futures open interest dropped by nearly 1% in the last 24 hours to $132 billion.
Looking ahead, there is a likelihood that these altcoins will rebound as the post-Federal Reserve drop was likely a knee-jerk reaction from investors. Besides, a look beneath the surface shows that altcoin ETFs have continued to accumulate assets in the past few days, with Chainlink adding $2.5 million and Solana funds adding $4.85 million.
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