The crypto market has taken a significant hit, losing 2.10% in the last 24 hours. The market capitalization has dropped to $3.17 trillion, marking its lowest point in five days. As reported by The Bit Journal, major cryptocurrencies like Bitcoin (BTC) are under intense selling pressure, driven by global events, including easing tensions in the Middle East and U.S. economic policies.
Bitcoin Faces Sharp Decline Amid Investor Actions
Bitcoin has fallen from its November 22 peak of $99,830 to $91,377, a loss of 8%. Data from CryptoQuant highlights that Bitcoin’s profit and loss (P/L) ratio has reached levels last seen in March 2024, suggesting long-term investors are locking in profits.
Furthermore, U.S. President Biden’s comments on reducing tensions between Lebanon and Israel have diminished demand for safe-haven assets like Bitcoin. Technical factors such as a drop in the RSI and Bitcoin’s overbought position have made surpassing the $100,000 mark increasingly challenging. This has amplified selling pressure across the market.
Volatility Surges in Bitcoin Futures
The Bitcoin futures market has also seen heightened volatility. Nick Forster, founder of Derive, noted that traders are actively deploying strategies to hedge against price drops. This is reflected in Bitcoin options data for contracts expiring on December 27, which show a 30% decline in call-put skews.
Options analysis indicates a 68% probability of Bitcoin falling to $81,493 or rising to $115,579. Extreme scenarios, however, have just a 5% likelihood. Such volatile swings could lead to significant price fluctuations in the coming months.
Future Outlook for the Crypto Market
The ongoing downturn has sparked debate among investors about whether the market will recover or experience further declines. Michael van de Poppe, founder of MN Trading, predicts that Bitcoin may remain range-bound in the short term but expects certain altcoins to demonstrate strong performance during this phase.
Long-term institutional confidence remains intact. MicroStrategy recently purchased 55,500 BTC at an average price of $97,862, showcasing sustained belief in Bitcoin’s future potential despite market turbulence.
Altcoin Performance: Winners and Losers
Altcoins have displayed mixed reactions to the market slump. On the losing side, Sandbox (SAND) dropped 12.03%, Stellar (XLM) fell 10.07%, and Decentraland (MANA) lost 8.24%. Other altcoins, such as Arbitrum (ARB), Maker (MKR), and Ethereum Classic (ETC), also experienced losses exceeding 5%.
Conversely, some altcoins showed impressive gains. Fantom (FTM) surged 13.86%, Sei (SEI) rose 13.55%, and Injective (INJ) gained 13.05%. Additionally, Algorand (ALGO) climbed 10.59%, while Sui (SUI) and Theta Network (THETA) were among the notable gainers.
Market Sentiment Remains Divided
As highlighted by The Bit Journal, the crypto market remains in a state of flux. Investors are closely monitoring trends and assessing potential recovery signals. With increased institutional activity and ongoing global developments, the coming weeks will be pivotal for the market’s trajectory.
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