In the final days of 2024, the cryptocurrency market is witnessing significant volatility. XRP leads the decline, dropping over 5% due to the strengthening of the US dollar, negatively impacting global currencies and assets, including Bitcoin. Other coins like Dogecoin, Solana, Ether, and BNB also saw declines of up to 2%. The total market capitalization has decreased by 3%, while the CoinDesk 20 index dropped by 3.5%.
The US stock market also fell as investors trimmed their positions amid year-end uncertainty, and Asian markets reversed previous gains. Historically, Bitcoin tends to move in the opposite direction of the dollar, and its recent decline was driven by a preference for traditional investments during a strong dollar period.
Expectations for a "Christmas rally" did not materialize as anticipated, with Bitcoin's price dropping nearly 4% this month, although still up 47% for the quarter. Some analysts remain optimistic about the long-term development of cryptocurrency, despite the current challenges in the market, predicting that changes in US regulatory policy could benefit the cryptocurrency ecosystem under the upcoming new administration.
The Fear & Greed Index in cryptocurrency has dropped to a level of 65 as Bitcoin just experienced a downturn, currently priced around $93,000, down 13.7% over the past 12 days. Despite this decline, the index remains in the greed zone but is at its lowest level since mid-October. This index maintained above 70 in November and December after the US elections concluded with many pro-cryptocurrency politicians taking office, peaking at 94 on November 22.
Market analysts predict the potential for volatility and price movements, with some forecasts of the "Hump Slump Bump Dump Pump" model for Bitcoin. Despite recent fluctuations, Bitcoin remains the best-performing asset of the past decade, with a return of 129% in 2024, far exceeding traditional assets like gold and the S&P 500.
Overall, although the cryptocurrency market is experiencing significant volatility, signals of policy change and long-term development continue to generate great hope for investors and cryptocurrency enthusiasts.
