The cryptocurrency market is experiencing significant turbulence despite growing institutional adoption. A surprisingly resilient US labor market has dashed hopes for imminent interest rate cuts, triggering substantial selling pressure. As Texas formally establishes Bitcoin as a strategic reserve asset, investors are anxiously watching whether crucial support levels will hold or if a deeper decline is imminent.
Unexpected US Economic Strength Disrupts Market Expectations
Recent employment data from the United States has dramatically shifted market sentiment. The economy added 119,000 new jobs, far surpassing economists’ projections of 50,000. For cryptocurrency investors, this robust report delivered unwelcome news: the likelihood of a Federal Reserve rate cut in December has plummeted to approximately 40%, according to the FedWatch Tool.
The emerging “higher for longer” interest rate scenario is strengthening the US dollar while draining liquidity from risk-sensitive assets like Bitcoin. The digital currency promptly reacted to these developments, sliding to a new 52-week low around $85,900. Market sentiment has rapidly deteriorated into “fear” territory, with derivative market liquidations further accelerating the downward momentum.
Texas Establishes Strategic Bitcoin Reserve
Amid the current sell-off, significant fundamental developments are unfolding that could provide long-term support. The Texas Strategic Bitcoin Reserve has become fully operational under legislation SB 21, officially authorizing the state to hold Bitcoin as an inflation hedge and financial resilience measure within its treasury.
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This milestone represents substantial progress for institutional acceptance at the governmental level. However, macroeconomic pressures currently dominate short-term price action. With the $90,000 threshold now breached, bullish investors are struggling to prevent further declines. The coming weekend will likely determine whether the market can establish a foundation for recovery or if sellers will maintain control.
Changing Ownership Patterns Emerge
Current market dynamics reveal intriguing shifts in investor behavior. According to a new VanEck report, the downward price pressure isn’t solely driven by short-term speculators. Investors who have held their coins for three to five years are aggressively exiting positions, with this cohort reducing their holdings by a significant 32%.
This group, which entered the market during the 2020-2022 cycle, appears to be capitulating and now represents resistance. Meanwhile, long-term “original whales” (holding over five years) and smaller retail investors are using the price dip to accumulate more Bitcoin. A substantial wealth transfer is currently underway from medium-term holders to committed long-term investors.
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