Bitcoin retreats from recent gains
Bitcoin dropped back to around $90,000 in early U.S. trading hours on Friday, continuing an overnight decline that started earlier than the typical Sunday evening pattern we’ve seen lately. This move essentially reverses much of the bounce from last Sunday’s sharp drop, which had pushed bitcoin all the way down to $84,000 at one point.
I think what’s interesting here is the timing. According to Velo data, the most bearish period over the past six months has consistently been the hour before U.S. markets open and the first hour of trading. Friday has also been the most consistently negative day of the week during this same period. So perhaps we’re just seeing that pattern play out again.
Altcoins and crypto stocks follow downward
Ethereum’s ether fell about 2% in line with bitcoin’s decline, while other major altcoins saw steeper drops. Solana, Cardano, Dogecoin, and Hype were all down more than 4% each. Crypto-related equities followed suit, with companies like MicroStrategy, Galaxy Digital, CleanSpark, and American Bitcoin showing declines ranging from 4% to 7%.
This broad decline across the sector suggests something more than just bitcoin-specific movement. It feels like a general risk-off sentiment in crypto assets, though I’m hesitant to draw too many conclusions from one day’s trading.
Consumer sentiment data provides modest relief
The University of Michigan Consumer Sentiment numbers released at 10 am ET offered a bit of relief from the bearish mood. The December 1-Year Consumer Inflation Expectation fell to 4.1% from 4.5% previously, while the 5-Year Consumer Inflation Expectation dropped to 3.2% from 3.4%.
Now, these surveys are somewhat anecdotal and tend to be influenced by political preferences of respondents. But with the lack of official economic data recently, these private surveys have taken on greater significance. Bitcoin did manage a modest bump back to the $91,000 area in the minutes following the report’s release.
Market consolidation ahead?
The current action might reinforce prior analyst forecasts that instead of a rapid rebound, we could see more consolidation toward year-end for the crypto market. That wouldn’t be entirely surprising given the volatility we’ve experienced recently.
What strikes me is how these movements seem to follow certain patterns—the Friday weakness, the pre-market trading hours being particularly bearish. It makes me wonder if we’re seeing algorithmic trading patterns or if there’s something structural about liquidity flows during these times.
Anyway, the market’s reaction to the inflation expectations data suggests that traditional economic indicators still matter for crypto, even if the relationship isn’t always straightforward. The modest recovery after the report shows that not all news is bad news, even on a down day.
