In the early hours of September 26, the cryptocurrency market faced significant turmoil as Bitcoin, the leading cryptocurrency, breached the critical $110,000 mark, dropping to a low of $108,631. Ethereum (ETH) mirrored this decline, falling below the $4,000 threshold to settle at $3,815. Solana (SOL) also saw steep losses, slipping below $200 to a low of $191.32. This broad downward spiral affected nearly all altcoins, reinforcing a negative trend across the market.
In the realm of U.S. macroequities, major indices reflected a similarly bleak outlook. The Nasdaq Composite registered a decrease of 0.5%, while the Dow Jones Industrial Average fell by 0.38%, and the S&P 500 also dipped by 0.5%. The spot price of gold stood at $3,741 per ounce, reflecting a minor decrease of 0.08%. This trend raised concerns among investors, shattering the long-held dreams of an “altcoin season” and shifting sentiment from optimism about a bull market to fears of a bear market.
The current market panic index has plummeted to 28, indicating a growing sentiment of panic among investors. The uncertainty surrounding potential rate cuts by the Federal Reserve is exacerbated by recent statements from Donald Trump, who has threatened new tariff measures. Following the release of U.S. initial jobless claims and other economic data, the probability of a 25-basis-point interest rate cut by the Federal Reserve in October has swung to 83.4%, a sharp decline from 91.9%. Concurrently, the likelihood of the Fed maintaining the current interest rate has risen to 16.6%.
Internal shifts within the Federal Reserve remain uncertain, particularly with Trump’s intention to dismiss Federal Reserve Governor Lisa Cook. Additionally, a coalition of former Federal Reserve chairs, Treasury Secretaries, and prominent economists recently urged the U.S. Supreme Court not to permit Trump’s move against Cook. Amid these tensions, Trump’s announcement regarding impending tariffs further stirs anxiety, as historically, such measures have led to declines in risk assets.
As unfavorable macroeconomic conditions persist, analysts and industry figures are weighing in on the future performance of crypto assets. Andrew Kang, founder of Mechanism Capital, offered a bearish outlook on Ethereum’s future, heavily investing in short-term put options. He dismissed Tom Lee’s optimistic projections for Ethereum as “moronic” and provided a series of critiques, stating that stablecoins and real-world assets are unlikely to generate expected returns and asserting institutions’ interest in staking ETH is largely a fantasy. He emphasized that the narrative surrounding Ethereum has become saturated and its fundamentals do not support further valuation growth.
Data analytics firm Altcoin Vector indicated that despite recent downturns, expectations for altcoin gains persist, noting that Bitcoin’s stability is crucial for altcoins. Signs of market risk aversion remain stable, with no noticeable structural fragility being observed. Analysts from Glassnode suggest Bitcoin might fall towards the $90,000 to $105,000 range, stating that its current value is below the 0.95 cost basis percentile, a historically significant risk indicator.
Matrixport provided insights indicating that as long as Bitcoin remains above $109,899, the bull market can be considered intact. They noted key differences in this cycle’s trends compared to previous ones, particularly the influence of institutions rather than just retail investors, and pointed to the 21-week moving average as a significant indicator of market health.
Lastly, the tracking platform Santiment commented on social media trends, reporting a spike in mentions of “buying the dip.” This increase, while typically viewed as a bullish sentiment among retail investors, may actually serve as a contrarian indicator. Santiment emphasized that true opportunities to buy arise when general optimism fades and investors begin selling at a loss, suggesting that further selling pressure could be imminent in the current market scenario.
