2024 is coming to a close with a lot of notable fluctuations in the cryptocurrency market. From sudden price drops to debates surrounding US fiscal policy, this year has seen strong ups and downs for both Bitcoin and other altcoins.
Cryptocurrency Market Going Through A Tough Correction
December 2024 was a challenging month for the crypto market as Bitcoin’s price plummeted following comments from the US Federal Reserve Chairman, Jerome Powell. Expectations of a rate cut were not met, causing Bitcoin to quickly slide below the $100,000 mark, eventually settling below $96,000 within 24 hours – a 4.8% drop.
Altcoins were also hit hard, with the CoinDesk 20 Index down more than 10%. Ethereum lost 10.8%, while other coins like Cardano, Chainlink, and Dogecoin fared worse, falling between 15% and 20%. The total amount of liquidations due to leveraged positions reached nearly $1.2 billion, showing a broad reaction to the Fed's decision.
Market Analysis and Short Term Outlook
Despite the slight gains in traditional markets, volatility in the crypto market continues. Many analysts believe that this correction is necessary after the strong growth of the past year. Part of the selling pressure may stem from the need for year-end tax breaks.
Bitcoin is now facing deep downside pressure, having suddenly dropped more than $12,000 in two days, to around $97,304. Macro factors that have destroyed the previous rally have created panic among both retail and institutional investors. Data suggests that BTC could fall further, with some experts predicting a bottom in the mid-$80,000s.
However, onchain data points to large accumulation zones around $60,000 to $67,000, which could prove to be a solid foundation for long-term investors. Overall, the market remains volatile due to the shift in US macro policy and previous optimism, highlighting its vulnerability to further shocks.
There is not much left in 2024, but it is certain that the flexibility and resilience of the crypto market will continue to be tested in the coming time.
