Why is Cryptocurrency Market Down Today (DEC 11)?

The cryptocurrency market has dropped over the past 24 hours, extending its monthly loss to 13%. This decline is largely due to a broader risk-off sentiment, triggered by the U.S. Federal Reserve’s recent decision on interest rates. 

The crypto market is down to $3.07 trillion, with a 3% reduction in the same. Although the overall trading volume is still high of 151 billion, significant cryptocurrencies, such as Bitcoin, Ethereum, XRP, and Solana, continue to lose.

Here’s Why Cryptocurrency Market Is Down Today

The downturn in the cryptocurrency market began shortly after U.S. Federal Reserve Chairman Jerome Powell’s speech about the economy. Bitcoin dropped below $91,000, marking a 3% decline. Ethereum also saw a 4% drop in the past 24 hours. 

Solana faced the most significant loss, with a 6% decrease. XRP, which had been more resilient, also experienced a slight dip but continues to hover above $2.

The major cause of this fall is that the Fed has reduced interest rates by 25 basis points, the third time it has lowered interest rates of 2025. But the comments made by Powell indicated that additional rate reductions could be held till 2026.

This hawkish view, coupled with indications of long-term tightening, led to the increase in correlation between cryptocurrencies and conventional equities, especially in the Nasdaq-100. This, in turn, increased the volatility of the market and resulted in a wide-scale sell-off of risk assets, including digital currencies.

Also, leveraged positions were de-leveraged, and this led to 514 million liquidations, and it took only 24 hours. Bitcoin experienced long liquidations in the value of 174 million, and Solana had 500 million risk. 

Open interest of perpetual contracts fell by 3.5%, an indication that a high number of traders are lowering their leveraged positions.

Impact of the Fed’s Decision on Crypto Markets

The lowering of interest rates by the Federal Reserve and its reluctance to make changes in the future has raised eyebrows within the financial circles. The speech by Powell suggested that the Fed can freeze its rate cuts until 2026 because of the risks of inflation.

SUMMARY OF FED DECISION (12/10/2025):

1. Fed cuts rates by 25 bps in 3rd rate cut of 2025

2. Fed will consider “extend and timing” of additional adjustments

3. Fed will begin purchasing US Treasury Bills on December 12th

4. Fed will buy $40 billion of US Treasury bills in 30…

— The Kobeissi Letter (@KobeissiLetter) December 10, 2025

Such ambiguity has added to the general selling of risk assets, including cryptocurrencies. In reaction, Fed also declared that it would purchase $40 billion of U.S Treasury Bills within the next month, beginning December 12, to stabilize the economy.

Crypto Market Inflows Hit Lowest Level Since April

The inflows of cryptocurrencies markets have significantly decreased to the lowest since April of this year, at 6.2 billion. This massive capital reduction is noted by the prevailing market statistics, which show a steep fall in different positions.

Most recent data have evolved both Bitcoin and Ethereum to negative levels in terms of capital outflows, with the stablecoins appearing to be the most consistent over time. The current trends are signifying constant volatility in the market.