Bitcoin plunged deeper into a bear market on Friday, with the broader cryptocurrency market taking a heavy hit as investors rotated away from risk-on assets.

Over the past 24 hours, Bitcoin (BTC) dropped 5.6% to $97,204, trading roughly 30% below its early October peak, according to CoinDesk data. Other major tokens also suffered significant losses: Ethereum (ETH) fell 9.1%, Solana (SOL) dropped 8.3%, and XRP slid 8.7%, as reported by Kraken.

Two key factors contributed to the selloff. First, investors are offloading risk-on assets, including tech stocks and cryptocurrencies, amid growing concerns over inflated artificial-intelligence valuations. The tech-heavy Nasdaq Composite index fell 2.3% on Thursday, marking its worst session in over a month, with futures pointing 0.9% lower ahead of Friday’s open.

Second, doubts about a potential Federal Reserve rate cut in December added pressure. Multiple Fed officials adopted a cautious tone on Thursday, causing traders to reduce expectations for monetary easing. The CME FedWatch tool now indicates a 50% probability of a quarter-point rate cut, down from 67% a week ago.

Analysts note that if the Fed refrains from cutting rates, cryptocurrencies could face further pressure. Higher borrowing costs make digital assets less attractive compared to safer, interest-bearing investments such as bonds and savings accounts.

The market now watches closely for both macroeconomic signals and investor sentiment, as Bitcoin and its peers navigate continued volatility.