Bitcoin slides near $103,000 as December rate cut becomes more uncertain

Bitcoin, Ethereum and major cryptocurrencies fell Wednesday morning as investor profit-taking accelerated amid growing uncertainty over a potential December rate cut.

According to The Block’s bitcoin price page, the world’s largest cryptocurrency fell 3% in the past 24 hours to trade at $103,222. Ether dropped 4.7% to $3,434, XRP slid 5.3% to $2.4, and Solana declined 8.85% to $154.76.

Bitcoin had fallen below the $103,000 mark to around $102,600 earlier on Tuesday. This decline came after bitcoin showed modest recovery from lower levels of around $101,500 earlier in the month to over $106,600.

“Bitcoin’s drop was driven by profit-taking and heavy long liquidations after failing to reclaim the $107K resistance,” said Vincent Liu, CIO at Kronos Research.

The cryptocurrency’s brief uptick was triggered by the U.S. Senate’s passage of the bill to reopen the government after a record-setting shutdown, encouraging risk-on sentiment in the market. However, Liu noted that it was not enough to counter profit-taking pressure, leveraged liquidations, and lingering technical weakness.

“The macro relief rally faded fast,” said Liu, who identified $100,000 as the next key psychological support level. “A further drop could trigger more liquidations and heightened volatility.”

Rate cut conflicts

Meanwhile, the U.S. Federal Reserve’s potential decision to make another interest rate cut in December remains the main positive catalyst for crypto traders.

While the market was initially hopeful for the rate cut to take place at the year-end, Fed Chair Jerome Powell indicated that another cut in December is not a done deal. Furthermore, the Wall Street Journal reported earlier today that the U.S. central bank has become increasingly divided over a December rate cut, adding more uncertainty for investors.

The CME Group’s FedWatch Tool currently gives a 66.9% chance that the Fed would make another rate cut at its Dec. 9-10 meeting.

Even if the Federal Reserve decides to make the cut next month, the result may be far from a major price surge, Presto Research Associate Min Jung told The Block.

“A confirmed cut could meaningfully revive risk appetite and push BTC toward new highs, but with markets already pricing in roughly a 70% chance, much of the optimism may already be reflected in current valuations,” Jung said.