Crypto Market Corrects Again Beginning of Second Week of December 2023, Here's the Cause

The crypto market experienced a sharp decline on Monday, December 11, 2023, with total market capitalization down more than 4 percent. The main cause was the price of Bitcoin which suddenly fell 5 percent to USD 41,300 or the equivalent of IDR 644.9 million (assuming an exchange rate of IDR 15,616 per US dollar). 

Tokocrypto trader, Fyqieh Fachrur, explained that the second week of December 2023 provided less than encouraging news for crypto market players. The crypto and Bitcoin markets experienced a sharp correction which was the biggest decline in more than a month, after previously experiencing an increase of more than 12 percent over the last 30 days.

“There is a high possibility that investors will start to take a wait-and-see attitude, resulting in massive sell-offs and widespread market liquidation. "This could be caused by the macroeconomic situation in the US which is the focus of investors' attention this week," said Fyqieh in a press release, Monday (11/12/2023). 

Fyqieh added that they are preparing for two major economic events that will still occur in 2023. 

The crypto market is gearing up for a challenging week as all eyes are on news regarding the upcoming CPI (Consumer Price Index) and FOMC (Federal Open Market Committee). 

On Tuesday, attention will be focused on the release of the US consumer price inflation report for November. Initial predictions suggest a continued slowdown in the annual inflation rate.

"Data regarding US CPI inflation this week is increasingly important, especially because investors are increasingly anticipating the possibility of an interest rate cut by the Federal Reserve (The Fed) in March," explained Fyqieh.

If inflation data shows an inflation rate of 3 percent or even lower than expected, this will likely increase expectations for a cut in interest rates. In this scenario, investors will likely look for opportunities in the crypto market, given the potential for greater returns in riskier assets such as cryptocurrencies. 

Conversely, if the inflation rate suddenly spikes, it could prompt the Fed to continue their efforts to deal with inflation. The Fed will announce a decision on interest rates. 

The current consensus among investors is that the Fed will most likely maintain current policy, as many believe it has achieved its monetary tightening measures.

With all these factors in play, expect this week to bring significant fluctuations to the price of Bitcoin and the crypto market as a whole, with the effects likely to be felt in the next few months. 

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