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Bitcoin and XRP Rally While Ethereum Struggles: Why One Analyst Sees ETH Dropping to $1,100

MarketDash Editorial Team
6 hours ago
Cryptocurrencies bounced back Tuesday even as stocks tumbled, with the U.S. unemployment rate hitting its highest level since September 2021. But Ethereum's failure to break $3,000 has analysts warning of a potential plunge to $2,000 or lower.

Here's an interesting divergence: while stocks spent Tuesday nursing their wounds after an ugly unemployment report, cryptocurrencies decided to have a little bounce-back party. Bitcoin (BTC) climbed 1.71% to $87,615.03, XRP (XRP) jumped 2.11% to $1.92, and Dogecoin (DOGE) added 1.81% to reach $0.1318. Even Solana (SOL) joined the rally, rising 1.87% to $128.93.

The outlier? Ethereum (ETH), which basically went nowhere, slipping 0.10% to $2,954.33 as of 8:20 p.m. ET. And that's the setup for what might be the most bearish call of the week.

Why Ethereum's Stall Matters More Than You Think

Bitcoin managed to touch an intraday peak of $88,170 before pulling back slightly overnight, showing some genuine momentum. But Ethereum? It couldn't break through the psychologically important $3,000 level, and trading volume dropped 22% in the last 24 hours. That's not exactly the kind of action that inspires confidence.

Ali Martinez, a widely followed cryptocurrency analyst and trader, laid out a stark warning: if Ethereum closes December below $2,930, we could see it tumble to $2,000 or even $1,100. That's not a typo. The second-largest cryptocurrency by market cap could potentially lose anywhere from 32% to 63% of its current value, depending on how this plays out.

Meanwhile, the broader crypto market saw roughly $260 million liquidated over the past 24 hours, according to Coinglass. Long liquidations accounted for more than half of that total, which tells you plenty of optimistic bets got crushed. But here's something interesting: Bitcoin's open interest fell 3.5% in the last 24 hours. When the spot price rises while open interest drops, that often signals short covering—traders buying back positions to close out bearish bets. In other words, some of Bitcoin's rally might be driven by bears throwing in the towel rather than fresh buying enthusiasm.

Crypto Stocks Climb Despite Market Jitters

The crypto-adjacent stocks had a decent day too. Strategy Inc. (MSTR) closed up 3.34%, and Bitmine Immersion Technologies Inc. (NASDAQ:BMNR) gained 1.42% during regular trading. These moves came even as the broader stock market struggled with some uncomfortable economic data.

Speaking of which, let's talk about why stocks had such a rough Tuesday. The Bureau of Labor Statistics reported that nonfarm payrolls rose by 64,000 in November, slightly above the 50,000 jobs economists expected. That sounds fine until you look at the unemployment rate, which climbed to 4.6%—the highest level since September 2021, up from 4.4% in September. That's the kind of jump that makes people nervous about the economy's direction.

What the Jobs Report Means for Rate Cuts

The major indexes all closed lower. The Dow Jones Industrial Average dropped 302.30 points, or 0.62%, to end at 48,114.26. The S&P 500 slid 0.24% to 6,800.26. The tech-heavy Nasdaq Composite was the lone bright spot, managing to eke out a 0.23% gain to close at 23,111.46.

Now, you might think a rising unemployment rate would boost expectations for Federal Reserve rate cuts, but the market isn't quite buying it yet. According to the CME FedWatch tool, the odds of a 25 basis point rate cut at the Fed's January meeting nudged up only slightly from 24.4% to 25.5% over the past 24 hours. That's barely a move at all.

The Risk Aversion Problem

Analysts at B2BINPAY, a cryptocurrency payment company, explained in a note that Bitcoin's recent struggles stem from a "renewed turn toward risk aversion" and increased correlation with technology stocks. Translation: when tech stocks get hammered, Bitcoin tends to follow along for the ride nowadays, which wasn't always the case.

"Given the picture, our base case is a test of the $80,000–$82,000 range if risk aversion persists," the analysts said. "A more stable recovery would likely require calmer conditions in U.S. equity markets, a slowdown in ETF outflows, and a move back toward the $95,000 area."

So Bitcoin needs to climb about 8% from current levels just to get back to where the bulls would feel comfortable, and that depends on stock market stability that doesn't currently exist.

The Bright Spots in Crypto

While the major cryptocurrencies had a mixed day, some smaller tokens posted eye-popping gains. Fasttoken (FTN) absolutely exploded with a 240.47% surge to $1.57. Four (FORM) jumped 40.13% to $0.4253, and Zeebu (ZBU) added 14.78% to reach $0.6806. These are tokens with market caps above $100 million, so we're not talking about complete micro-cap speculation here, though the volatility certainly suggests elevated risk.

The global cryptocurrency market capitalization stood at $2.97 trillion, up 0.71% in the last 24 hours. That's a modest gain that reflects the general resilience in crypto despite the challenging macro environment.

The bottom line? Cryptocurrencies showed some life Tuesday, but the storm clouds haven't exactly cleared. Ethereum's inability to punch through $3,000 on declining volume is particularly worrying if you believe Martinez's price targets. And with Bitcoin still trading well below its recent highs while maintaining that pesky correlation with nervous tech stocks, the path forward looks anything but smooth. The market gave us a bounce, but whether that's the start of a recovery or just a pause before another leg down remains the multi-trillion-dollar question.

Back to News

Bitcoin and XRP Rally While Ethereum Struggles: Why One Analyst Sees ETH Dropping to $1,100

MarketDash Editorial Team
6 hours ago
Cryptocurrencies bounced back Tuesday even as stocks tumbled, with the U.S. unemployment rate hitting its highest level since September 2021. But Ethereum's failure to break $3,000 has analysts warning of a potential plunge to $2,000 or lower.

Here's an interesting divergence: while stocks spent Tuesday nursing their wounds after an ugly unemployment report, cryptocurrencies decided to have a little bounce-back party. Bitcoin (BTC) climbed 1.71% to $87,615.03, XRP (XRP) jumped 2.11% to $1.92, and Dogecoin (DOGE) added 1.81% to reach $0.1318. Even Solana (SOL) joined the rally, rising 1.87% to $128.93.

The outlier? Ethereum (ETH), which basically went nowhere, slipping 0.10% to $2,954.33 as of 8:20 p.m. ET. And that's the setup for what might be the most bearish call of the week.

Why Ethereum's Stall Matters More Than You Think

Bitcoin managed to touch an intraday peak of $88,170 before pulling back slightly overnight, showing some genuine momentum. But Ethereum? It couldn't break through the psychologically important $3,000 level, and trading volume dropped 22% in the last 24 hours. That's not exactly the kind of action that inspires confidence.

Ali Martinez, a widely followed cryptocurrency analyst and trader, laid out a stark warning: if Ethereum closes December below $2,930, we could see it tumble to $2,000 or even $1,100. That's not a typo. The second-largest cryptocurrency by market cap could potentially lose anywhere from 32% to 63% of its current value, depending on how this plays out.

Meanwhile, the broader crypto market saw roughly $260 million liquidated over the past 24 hours, according to Coinglass. Long liquidations accounted for more than half of that total, which tells you plenty of optimistic bets got crushed. But here's something interesting: Bitcoin's open interest fell 3.5% in the last 24 hours. When the spot price rises while open interest drops, that often signals short covering—traders buying back positions to close out bearish bets. In other words, some of Bitcoin's rally might be driven by bears throwing in the towel rather than fresh buying enthusiasm.

Crypto Stocks Climb Despite Market Jitters

The crypto-adjacent stocks had a decent day too. Strategy Inc. (MSTR) closed up 3.34%, and Bitmine Immersion Technologies Inc. (NASDAQ:BMNR) gained 1.42% during regular trading. These moves came even as the broader stock market struggled with some uncomfortable economic data.

Speaking of which, let's talk about why stocks had such a rough Tuesday. The Bureau of Labor Statistics reported that nonfarm payrolls rose by 64,000 in November, slightly above the 50,000 jobs economists expected. That sounds fine until you look at the unemployment rate, which climbed to 4.6%—the highest level since September 2021, up from 4.4% in September. That's the kind of jump that makes people nervous about the economy's direction.

What the Jobs Report Means for Rate Cuts

The major indexes all closed lower. The Dow Jones Industrial Average dropped 302.30 points, or 0.62%, to end at 48,114.26. The S&P 500 slid 0.24% to 6,800.26. The tech-heavy Nasdaq Composite was the lone bright spot, managing to eke out a 0.23% gain to close at 23,111.46.

Now, you might think a rising unemployment rate would boost expectations for Federal Reserve rate cuts, but the market isn't quite buying it yet. According to the CME FedWatch tool, the odds of a 25 basis point rate cut at the Fed's January meeting nudged up only slightly from 24.4% to 25.5% over the past 24 hours. That's barely a move at all.

The Risk Aversion Problem

Analysts at B2BINPAY, a cryptocurrency payment company, explained in a note that Bitcoin's recent struggles stem from a "renewed turn toward risk aversion" and increased correlation with technology stocks. Translation: when tech stocks get hammered, Bitcoin tends to follow along for the ride nowadays, which wasn't always the case.

"Given the picture, our base case is a test of the $80,000–$82,000 range if risk aversion persists," the analysts said. "A more stable recovery would likely require calmer conditions in U.S. equity markets, a slowdown in ETF outflows, and a move back toward the $95,000 area."

So Bitcoin needs to climb about 8% from current levels just to get back to where the bulls would feel comfortable, and that depends on stock market stability that doesn't currently exist.

The Bright Spots in Crypto

While the major cryptocurrencies had a mixed day, some smaller tokens posted eye-popping gains. Fasttoken (FTN) absolutely exploded with a 240.47% surge to $1.57. Four (FORM) jumped 40.13% to $0.4253, and Zeebu (ZBU) added 14.78% to reach $0.6806. These are tokens with market caps above $100 million, so we're not talking about complete micro-cap speculation here, though the volatility certainly suggests elevated risk.

The global cryptocurrency market capitalization stood at $2.97 trillion, up 0.71% in the last 24 hours. That's a modest gain that reflects the general resilience in crypto despite the challenging macro environment.

The bottom line? Cryptocurrencies showed some life Tuesday, but the storm clouds haven't exactly cleared. Ethereum's inability to punch through $3,000 on declining volume is particularly worrying if you believe Martinez's price targets. And with Bitcoin still trading well below its recent highs while maintaining that pesky correlation with nervous tech stocks, the path forward looks anything but smooth. The market gave us a bounce, but whether that's the start of a recovery or just a pause before another leg down remains the multi-trillion-dollar question.