Why did the cryptocurrency market suddenly collapse, wiping out billions in just a few hours, and what does this mean for Bitcoin and altcoin investors moving forward?

Crypto markets are in free fall

Over the past two days, the cryptocurrency market has plummeted, suffering a sharp drop that has reduced its overall value by billions. According to CoinGecko, the global cryptocurrency market capitalization has fallen by almost 8.7% in the last 24 hours, reaching $3.52 trillion.

Global Cryptocurrency Market Capitalization Snapshot | Source: CoinGecko.

While bitcoin btc-1.68%

Bitcoin has weathered the storm relatively well, losing just over 2% to $95,800 as of December 10, which cannot be said for most altcoins.

EthereumEthereum -6,33%

Ethereum is down about 6% to $3,580 as of writing, while RippleXRP is down 13.31%

XRP fared much more sharply, falling 12.5% ​​to $2.09. USA and increasing its weekly losses to 17%. Solana Solana solution -6.57%

Solana, one of the top blockchain platforms in the industry, also fell 6% to $210.

The carnage was not limited to the main altcoins. The real bloodbath unfolded in the meme coin segment, with Solana-based meme coins in the Pump.fun ecosystem plummeting by nearly 25%.

The question is what caused this sudden market turbulence? And more importantly, where is the market going next? Let's take a look at how technical and fundamental indicators are changing for Bitcoin and altcoins.

Turning to altcoins, the prospects seem even more intriguing. Michael van de Poppe suggests that altcoins are on the verge of breaking out of their longest bear market. According to Van de Poppe, with the weakening of the US dollar and expectations of increased liquidity, the stage seems set for a giant rise in altcoins.

Poppe's optimism is echoed by Kaizen, who drew parallels with December 2020, when a 30% drop in altcoins preceded a three-month rally that saw gains of more than 400%. The recent 25% drop in altcoins, while painful, could be a precursor to explosive growth.

However, it is important to temper optimism with caution, the inherent volatility of the crypto market means that sentiment can change overnight, as seen in the recent sharp crash. So trade wisely and never invest more than you can afford to lose.

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