Crypto Market Slumps as Risk Appetite Fades Ahead of Key U.S. Data

The cryptocurrency market weakened in tandem with global risk assets as investors adopted a cautious stance ahead of key U.S. economic data, extending a December downturn characterized by thinning liquidity and heightened uncertainty. The pullback reflects a broader shift in sentiment rather than isolated weakness in individual tokens, underscoring the fragile state of market confidence as the year draws to a close.

Bitcoin fell toward the $85,800 level during Asian trading hours, marking a decline of more than 4% over the past week. Selling pressure was evident across the broader digital asset market, with Ether sliding to around $2,930 and major altcoins such as Solana, XRP, and Dogecoin all posting weekly losses exceeding 5%. The synchronized decline highlights a market-wide retreat as traders reduce exposure amid macroeconomic headwinds.

This downturn mirrors weakness in traditional markets. Asian equities sold off sharply, with the MSCI Asia Pacific Index dropping 1.3%, while U.S. equity futures edged lower ahead of the November U.S. jobs report, which investors expect to signal a cooling labor market. In currency markets, the U.S. dollar hovered near two-month lows, while the Japanese yen strengthened toward 155 per dollar amid expectations of a Bank of Japan rate hike.

Total cryptocurrency market capitalization slipped to approximately $3.06 trillion, down 0.2% over the past 24 hours and more than 2% on the week. Although the market has defended the $3 trillion level repeatedly in recent days, analysts warn that the shift from an uptrend to sideways consolidation suggests weakening momentum. According to FxPro analysts, selling pressure since late November has disrupted the short-term structure, increasing downside risks.

Investor sentiment has deteriorated further, with the crypto fear and greed index falling to 16, signaling extreme fear. Historically, prolonged periods of fear without a clear catalyst have coincided with cyclical slowdowns. Technical analysts now view the $81,000 level as a potential baseline for Bitcoin, while Binance Research estimates the total crypto market cap has declined roughly 15% over the past month. With December typically marked by low liquidity, volatility risks remain elevated, and prediction markets increasingly expect Bitcoin to end the year below $100,000.