On December 11, Bitcoin (BTC) experienced a significant downturn, dropping 7% and erasing the gains it had made over the previous week. This downturn brought BTC to its lowest point in four months, at $41,329.
Following Bitcoin’s decline, there was a noticeable drop in the value of various altcoins, with many experiencing double-digit percentage losses. Despite this, experts and analysts in the market view this downturn as a normal part of the current price cycle. They note that after two months of bullish trends, a correction like this isn’t unexpected.
Will Clemente, a crypto analyst and co-founder of Reflexivity Research, commented that such corrections and market volatility tend to eliminate less committed investors and help stabilize the highly leveraged cryptocurrency markets. Another crypto trader, Remen, shared on X (previously known as Twitter) his belief that this downturn could set the stage for another bull run in altcoins. He also mentioned that Bitcoin might experience a prolonged period of fluctuation before it can start an upward trend again, especially since Bitcoin’s dominance appears to have peaked.
The significant market drop on December 11 also led to the liquidation of over $400 million in crypto-leveraged positions, effectively clearing the market. However, Bitcoin’s price has since rebounded, surpassing $42,000. This price momentum for BTC began in October, with the leading cryptocurrency making substantial gains, adding nearly $10,000 in value over the past month. Another analyst, Hitesh.eth, highlighted the significant price movement of BTC after almost six months of stagnant prices.
Since the end of October, BTC’s price has surged by 50%. Hitesh.eth pointed to on-chain data indicating consistent purchasing by accounts holding more than 1 BTC and accumulation by large-scale investors, or ‘whales’. The increasing interest from institutional investors and the push for the first Bitcoin-based exchange-traded fund have created favorable conditions for BTC, especially in anticipation of the significant Bitcoin reward halving event scheduled for April 2024.
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