Several key factors have influenced the decline in cryptocurrencies:

  1. Macroeconomic conditions:

    • Expectations of a rate cut by the US Federal Reserve next week have increased market volatility. While rate cuts typically support riskier assets like cryptocurrencies, uncertainty in economic forecasts has put pressure on the market.

  2. Capital rotation and profit-taking:

    • Many long-term investors have begun to take profits after significant growth in cryptocurrencies in 2024. This has led to mass selling, especially as the year approaches its end.

  3. Regulatory uncertainty:

    • Legal battles against Binance and Ripple continue, as well as the implementation of new regulations like MiCAR in the EU, which has increased pressure on the market.

  4. Options expiration:

    • Large cryptocurrency options contracts are set to expire in December, which traditionally leads to increased volatility due to mass repositioning by traders.

These factors combined have created instability and prompted a decline in cryptocurrency prices. To navigate the market better, it is important to monitor macroeconomic trends, regulatory changes, and the actions of major participants.

What to expect by the end of the year?

  1. US Federal Reserve decisions on rates: An expected interest rate cut of 0.25% on December 18, 2024, could stimulate investments in riskier assets like cryptocurrencies, which typically supports the growth of their value.

  2. Altcoin growth season: Many altcoins, such as Solana (SOL), Ripple (XRP), and Cardano (ADA), are showing significant growth amid increasing investor interest and ecosystem updates.

  3. Options expiration: A large number of crypto options will expire in December, often leading to sharp price fluctuations due to changes in traders' positions.

  4. Regulatory changes: The new MiCAR regulation in the EU and tightening rules in North America are affecting the DeFi market, adding an element of uncertainty.

  5. Behavior of long-term holders (LTH): Some large Bitcoin holders are taking profits, which puts pressure on prices. If short-term demand does not increase, this could impact the market.

Overall, depending on economic news and market activity, Bitcoin may reach new heights, but there is also a high likelihood of sharp fluctuations, especially under the influence of global economic factors. Caution is advised, and it is important to closely monitor news to respond promptly to changes.