Wall Street rebounds after intense sell-off – What’s holding Bitcoin?

Wall Street is bouncing back after a catastrophic day that left traders reeling. On December 18, U.S. markets faced a sell-off that slashed billions in value.

The Dow Jones, S&P 500, and Nasdaq all suffered massive losses as investors reacted to a hawkish Federal Reserve announcing fewer interest rate cuts in 2025. Today, markets are showing signs of life, but the fallout still lingers.

Fed Chair Jerome Powell described the economy’s future as “uncertain,” pointing out that inflation concerns and a strong labor market could slow down monetary easing.

The Dow dropped 1,123 points yesterday, landing at 42,326.87. That’s a 2.6% loss and the longest losing streak since 1974, with ten consecutive days in the red.

The S&P wasn’t spared, falling 3% to close at 5,872.16. The Nasdaq Composite tanked even harder, shedding 3.6% to hit 19,392.69.

Tech stocks lead the rebound

Today though, futures for major indices are trending higher, with Dow futures up 0.7%. Tech heavyweights Nvidia and Tesla are posting pre-market gains of over 2%, which tells us that investors might be using the sell-off as a buying opportunity.

Whether this bounce will last remains unclear, but for now, the bleeding has slowed. Economic data released earlier this week didn’t help the market’s nerves. U.S. GDP growth for the third quarter was revised up to 3.1% from an earlier estimate of 2.8%.

Meanwhile, initial unemployment claims dropped by 22,000 to 220,000, reinforcing the narrative of a resilient labor market.

Bitcoin struggles with volatility

Bitcoin isn’t faring much better. After hitting an all-time high of $108,000 earlier this week, it slipped below $100,000 overnight before recovering slightly. As of press time, it’s trading around $100,200.

On-chain data from the Binary Coin Days Destroyed (CDD) tells us that long-term holders are offloading their assets at these high prices, adding to selling pressure.

The situation gets more interesting when you look at exchange activity. Transaction volumes on both spot and derivative exchanges have fallen massively compared to previous years. But when volume spikes do happen, they tend to signal big price actions.

For instance, a peak in 2017 coincided with Bitcoin’s first major rally, while another in 2021 triggered its surge past $60,000. For now, Bitcoin’s average realized price is serving as a technical support level. If selling pressure continues, prices could test the $97,600 mark, especially if U.S. demand weakens further.

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