In the turbulent waves of the global cryptocurrency market, the sharp drop of Bitcoin on Friday undoubtedly set off waves. This plunge is not just a change in numbers, but an inevitable result of the interweaving of multiple market factors.
Technical review: When BTC climbed to a high of 72,000U, it encountered the same resistance level as on May 21. History is always surprisingly similar. The last time BTC pulled back from this position, it fell to 66,000U in just three days. Technical analysis enthusiasts may have predicted the possibility of this pullback, but the real market reaction was even more dramatic.
Impact of news: The release of the big non-agricultural employment data has brought great shock to the market. The additional 270,000+ non-agricultural population has made the Federal Reserve more determined to maintain high interest rates. This news undoubtedly poured cold water on investors who expected interest rate cuts to stimulate the market. Major institutions have adjusted their strategies, and the pessimism in the market has spread rapidly, causing the price of BTC to plummet.
Emotional fluctuations: When BTC rose from $57,000 to $72,000, many retail investors rekindled their enthusiasm for cryptocurrencies. However, this enthusiasm is often accompanied by blind pursuit of rising and falling prices. When BTC prices soared, they rushed into the market, and when prices plummeted, they fell into a vortex of panic selling. This emotional fluctuation undoubtedly exacerbated market volatility.
Fundamental considerations: BTC has risen to $73,000 since the ETF was approved, but it has been in a state of volatility for the past three months. While major institutions are accumulating, there are also those who dump at high prices. This short-term problem of consensus makes the market full of uncertainty. The upcoming summer vacation and the attitude of European and American trading institutions to play badly have further exacerbated market volatility.
The rise of altcoins: While BTC plummeted, the altcoin market presented a different picture. The rise of sectors such as MEME (meme coin) attracted the attention of a large number of retail investors. They began to believe in the power of collective consensus and no longer blindly followed institutional coins. The concepts of AI and demon coins also became hot topics in the market. These changes have undoubtedly brought new vitality to the cryptocurrency market.
In general, the plunge of BTC on Friday is the inevitable result of the interweaving of multiple factors in the market. But this does not mean that the end of the cryptocurrency market has come.
On the contrary, this plunge may be the process of the market self-adjusting and finding a new balance. For cryptocurrency traders, they should remain calm and rational and make reasonable decisions based on their own risk tolerance and investment goals.
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