The crypto rally that looked so promising earlier this week hit a wall on Thursday, with major digital assets sliding even as traditional stock markets pushed higher. Bitcoin (BTC) is now sitting at a crucial inflection point that could determine whether we're headed for new highs or settling in for a frustrating sideways grind.

Here's where things stood as of 8:25 p.m. ET:

The Rally Hits the Brakes

Bitcoin's rebound basically stalled out, with the leading cryptocurrency getting stuck in a tight $91,000-$92,000 range. Trading volume fell 19% over the past 24 hours, which isn't exactly what you want to see if you're hoping for a breakout. Lower volume often means less conviction, and less conviction means the market is waiting for something to convince it which way to move.

Ethereum had an even rougher day. It tried to break through $3,220 but got slapped down hard, tumbling all the way to $3,070 before clawing back some ground overnight. The second-largest cryptocurrency by market cap is clearly struggling to find its footing.

The pain spread to crypto-adjacent stocks as well. Strategy Inc. (MSTR) closed down 1.26%, while Coinbase Global Inc. (COIN) dropped 1.04% during regular trading hours.

According to Coinglass data, cryptocurrency liquidations reached $266 million over the past 24 hours, with long liquidations accounting for nearly $80 million of that total. That's traders betting on higher prices getting wiped out when those prices failed to materialize.

But here's the interesting part: Over $440 million in Bitcoin short positions are sitting on the edge of liquidation if Bitcoin manages to reclaim $95,000. That creates an interesting dynamic where a move higher could trigger a cascade of forced buying from shorts getting squeezed.

Bitcoin's open interest fell 0.48% in the last 24 hours, roughly matching the decline in spot price. Open interest measures the total number of outstanding derivative contracts, and when it falls alongside price, it typically indicates positions are being closed rather than new ones opening.

Alice Liu, Head of Research at CoinMarketCap, warned on Tuesday that crypto has entered a phase of high fear and high volatility. She went further, suggesting that Bitcoin's next genuine expansion cycle may not arrive until 2026. That's a sobering timeline if you're hoping for a quick return to euphoria.

A Few Winners in the Wreckage

Not everything was red on Thursday. A handful of smaller cryptocurrencies posted impressive gains:

The global cryptocurrency market capitalization stood at $3.14 trillion, down 0.92% over the past 24 hours.

Stocks Keep Climbing on Rate Cut Hopes

While crypto struggled, traditional markets continued their march higher. The S&P 500 gained 0.11% to close at 6,857.12, and the tech-heavy Nasdaq Composite rose 0.22% to settle at 23,505.14. The Dow Jones Industrial Average was the odd one out, dropping 31.96 points, or 0.07%, to end at 47,850.94.

What's driving the optimism? November's private payrolls data came in weaker than expected, suggesting the labor market is cooling. That might sound like bad news, but markets see it as good news because it increases the likelihood that the Federal Reserve will cut interest rates next week.

The CME FedWatch tool now shows an 87% probability of a 25-basis-point cut at next week's meeting. That's about as close to a sure thing as you get in markets.

The Critical Levels Everyone's Watching

Popular cryptocurrency analyst Michaël van de Poppe identified $3,100-$3,150 as a key resistance level for Ethereum, saying he wants to see it flip into a support zone.

"Well, it does say that buyers are willing to be stepping in on higher grounds than last week and that would signal a potential rally to $3,700," the analyst added.

Byzantine General, another widely followed crypto commentator, highlighted approximately $92,000 as the critical resistance level for Bitcoin. This is where things get interesting.

"If it breaks through it could fly over a $100,000 very quickly, but if it actually rejects here then we're probably stuck in this $92,000 – $82,000 range for a while," the analyst projected.

That's the question facing crypto markets right now. Is Bitcoin struggling a bit before its next leg higher, or are we looking at an extended period of consolidation? The answer probably depends on whether it can punch through that $92,000 ceiling in the coming days. If it does, the rush past six figures could happen fast, especially with all those short positions waiting to be liquidated. If it doesn't, buckle up for potentially weeks or months of range-bound trading that will test everyone's patience.