Bitcoin hits $104K as XRP, AVAX and Solana traders take profits

On By Littum

  • The valuation of the cryptocurrency sector fell 4% on Wednesday, falling towards $3.8 trillion.
  • While the Bitcoin price fell 2% to consolidate around the $104,600 mark, top altcoins such as XRP, AVAX and SOL suffered over 5% losses on the day.
  • The sell-the-news frenzy comes as the Fed expects fewer rate cuts in 2025.

Altcoin Market Updates: Solana, XRP AVAX Among Top Losers, Fed Triggers Sales News Frenzy

As US Federal Reserve governors on Wednesday predicted fewer interest rate cuts in 2025, crypto traders chose to take profits off the table.

This effectively ended a week-long rally in which Bitcoin (BTC), Ripple (XRP) and Avalanche (AVAX) have all posted double-digit gains since December 10.


Crypto Market Performance | December 18, 2024 | Source: Coingecko

According to data compiled by Coingecko, global crypto market capitalization fell 4.2% on Wednesday, reflecting a sector-wide sell-off after the US Federal Reserve cut its main policy rate by 25 basis points but expected fewer cuts next year.

  • The XRP price fell 5.2% and fell below the $2.50 mark as market euphoria peaked after the RLUSD stablecoin’s official launch on December 17th.
  • Solana (SOL) price also fell 5% before finding support around the $215 level.
  • Avalanche traders also booked profits on Wednesday, triggering a 5.6% price reduction before settling at the $47 level.

Today’s Chart: Bitcoin Traders Maintain Positive Outlook Despite Fed Jitters

When the US Fed meeting started on Tuesday, the market had priced in a 25 basis point rate cut, which has happened. Widespread anxiety surrounding this major market event had already triggered an outflow of 4.2% from the global crypto sector valuation over the past 24 hours. However, market data suggests that the majority of speculative traders still maintain a positive view of Bitcoin’s short-term price outlook.

While the Bitcoin price dipped below the $105,000 mark, the Coinglass chart below shows that speculative traders continue to drive more capital inflows towards the BTC futures markets.


Bitcoin (BTC) open interest vs. price | Source: Coinglass

As shown in the chart above, Bitcoin open interest rose to a new record high of $68.1 billion on Wednesday, reflecting $5 billion inflows in the last 48 hours.

When Open Interest continues to rise amid a price pullback, it signals robust bullish sentiment among short-term speculative traders. The move could set the stage for a quick breakout in the coming trading sessions for two main reasons.

First, increasing open interest in the midst of a price correction suggests that traders are accumulating leveraged long positions anticipating a rebound rather than exiting the market. This reinforces a “buy-the-dip” phenomenon that often precedes a sharp recovery.

If Bitcoin maintains its position above the $100,000 psychological support, a breakout towards the $110,000 resistance becomes increasingly likely.

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Crypto News Updates:

Ohio Legislature Proposes State-Backed Bitcoin Reserve to Protect Public Funds

Ohio State Representative Derek Merrin has introduced the Ohio Bitcoin Reserve Act, a bill aimed at establishing a state-backed Bitcoin reserve.

The proposed legislation would allow Ohio to invest excess funds in Bitcoin as a hedge against the devaluation of the US dollar.

Merrin emphasized the importance of Bitcoin in preserving the value of public funds, stating that it provides a robust complement to traditional investment portfolios amid inflationary pressures.

The proposal reflects growing state-level interest in Bitcoin, with Texas and Pennsylvania pursuing similar initiatives.

It also aligns with broader Republican strategies, including President-elect Donald Trump’s expected push for a national Bitcoin reserve and Senator Cynthia Lummis’ bill calling for 1 million BTC purchases over five years.

Bitcoin’s impressive 155% growth this year – spurred by a 50% post-election surge – reinforces its appeal as a strategic asset.

Arthur Hayes predicts major crypto sell-off during Trump’s inauguration

Arthur Hayes, former BitMEX CEO and CIO of Maelstrom, warns of a significant sell-off in the crypto market around the inauguration of Donald Trump on January 20, 2025.

Hayes attributes this potential downturn to a growing disconnect between investor expectations for pro-crypto policies under the Trump administration and the slow pace of political realities.

While Bitcoin rallied after Trump’s election victory, buoyed by optimism around favorable regulations, Hayes expects a sharp market correction as traders recalibrate their outlook.

Citing limited time for Trump to enact sweeping crypto reforms, Hayes believes the inauguration will serve as a turning point for investor sentiment.

He revealed plans to reduce Maelstrom’s crypto holdings ahead of the event to mitigate risks.

Hayes’ forecast signals caution for bullish traders who have fueled Bitcoin’s post-election rally, underscoring the importance of balancing speculative enthusiasm with realistic political timelines.

Trump-Backed World Liberty Financial Adopts sUSDe Stablecoin for DeFi Expansion

Donald Trump-backed crypto platform World Liberty Financial (WLFI) is integrating Athena’s sUSDe stablecoin as a central security asset in its DeFi ecosystem.

The move, pending management approval, will enable sUSDe deposits with dual rewards in sUSDe and WLFI’s native WLF tokens.

These incentives aim to increase liquidity and attract new users to WLFI’s upcoming Aave v3 instance.

If management rejects the proposal, WLFI and Athena plan to pursue alternative collaborative opportunities for mutual integration.

WLFI has also expanded its digital asset portfolio as part of its growth strategy by investing $500,000 in Athena and $250,000 in Ondo Finance.

The platform’s total holdings now stand at $83 million, with Ethereum (ETH) accounting for the largest share at $57 million, according to Arkham Intelligence.