The cryptocurrency market continues its pullback trend.
After reaching a high of $95,000 in the early session, Bitcoin has continued to face pressure. Bulls attempted to bounce back but encountered bearish resistance at $94,800 and briefly fell below $91,000. As of the time of writing, Bitcoin is trading at $92,446, down 2% in the last 24 hours. The altcoin market is performing even more weakly, with over 90% of the top 200 tokens by market capitalization recording losses.
The overall market capitalization of cryptocurrencies is currently $3.14 trillion, with Bitcoin's dominance at 57.3%.
In the U.S. stock market, the S&P, Dow Jones, and Nasdaq indices all closed higher, rising by 0.57%, 0.28%, and 0.63%, respectively.
Is the reason for the decline the overheating of the leveraged market?
The drop in Bitcoin may partly be due to excessive leveraged trading in the market, which gets forcefully liquidated when market fluctuations occur, leading to further price declines.
The pullback in Bitcoin 'can be attributed to' the rise in funding rates, which ultimately led the market to lean bearish. However, as funding rates return to normal ranges, further leveraged liquidations should be limited.
The current price trend of Bitcoin is similar to some previous local tops. At this time, Bitcoin is likely to experience a period of sideways consolidation. However, during this period, some other cryptocurrencies may perform well.
Bitcoin experienced a rapid rise between November 6 and November 22, without any significant imbalance between buying and selling. Such a rapid increase is usually followed by a subsequent correction to balance supply and demand. Therefore, Bitcoin may pull back to previous support levels or lower to digest the previous gains.
Yesterday's significant pullback in Bitcoin caught the market off guard. There are several fundamental reasons behind this:
1: The excitement after the election is gradually fading.
2: The psychological pressure brought by the $100,000 mark.
The recent pullback is attributed to Bitcoin hitting the 'first real resistance of the bull market cycle'.
The altcoin season 'is dead', Ethereum 'is dead'... the ultimate contrarian indicator.
The market is filled with pessimistic voices about Ethereum and altcoins 'having no trend'. However, this is the perfect contrarian indicator.
Despite Ethereum's poor performance, I still firmly hold my positions in it, as well as my long-term holdings in altcoins (some performing well, others poorly). Whenever everyone focuses on Bitcoin's price increase and abandons their positions in altcoins and Ethereum, only when the frenzy of chasing BTC at local tops occurs will the altcoin and Ethereum trends truly return.
The most worthwhile cryptocurrencies to buy during market downturns.
DOGE
Dogecoin (DOGE) is the largest and most popular meme coin in the world, having soared an astonishing 340% after Donald Trump won the U.S. presidential election. During this rise, Dogecoin broke through the strong resistance level of $0.35, but is currently consolidating in a narrow range between $0.35 and $0.44.
This ongoing consolidation provides a potential buying opportunity, as a breakout from this area could push DOGE up by 65%, reaching an all-time high (ATH) of $0.732 in the coming days.
XRP
Ripple's native token XRP recently experienced a significant surge after pro-cryptocurrency candidate Donald Trump won. Additionally, the imminent resignation of the U.S. Securities and Exchange Commission chairman and speculation surrounding the XRP ETF could further propel XRP's growth in the coming days.
These developments make XRP an attractive buying opportunity.
If bullish sentiment remains unchanged, the upward trend may further intensify. Notably, XRP's open interest (OI) has reached an all-time high, indicating high trader participation in the token.
Conclusion
The development of this round of the crypto bull market is filled with unpredictable factors. However, one thing is always easy to predict in each cycle: the inevitable emotional reactions of retail investors: the latest overvalued projects are too great, buy! The old undervalued projects are too boring, sell! Altcoins are dead, buy Bitcoin! Ethereum is failing, sell it!
Undoubtedly, this will be a challenging and significant period; let's stay focused and wait and see. Good luck to everyone!