As the year draws to a close, the cryptocurrency landscape is once again beset by volatility. Bitcoin‘s recent efforts to stabilize have been thwarted by abrupt selling episodes, which saw its price almost reach $90,000 only to lose approximately $3,000 within minutes. This sudden movement has not only affected Bitcoin but also exerted downward pressure on significant altcoins, reinforcing a cautious atmosphere among investors.
Why Has Bitcoin Struggled to Maintain $89,500?
Entering the week before Christmas, Bitcoin witnessed substantial price swings, oscillating between $85,000 and $90,000 over a few days. The release of inflation figures in the U.S. for November impacted its value, causing it to drop to $84,400. However, a weekend surge brought hope with prices exceeding $90,400 the following Monday, suggesting potential stability on the horizon.
Yet, consistent with prior trends, this optimism was short-lived as Bitcoin faced increased selling pressure, driving it below $87,000. While the market exhibited calmness during Christmas, Friday marked another shift in momentum. A quick plunge to $86,500 followed an attempt to rise, resulting in Bitcoin recording a daily dip of about 1.5% and its market capitalization slipping beneath $1.75 trillion.
What Led to Contrast in Altcoin Movements?
The challenges Bitcoin faces also echoed within major altcoins. Ethereum found it challenging to break past $3,000, retracing to support at $2,900. Similarly, XRP fell under its $1.90 support level. DOGE saw the most significant loss among high-cap altcoins, with LINK experiencing declines as well.
Nevertheless, some altcoins bucked the trend with noteworthy gains. ZEC surged by over 13%, climbing past $500, while RAIN observed about a 10% increase in daily trading. Other projects, such as Monero and HYPE, displayed minor gains. Despite a $40 billion shrinkage in crypto market value within the past day, the market stayed above the $3 trillion mark.
“The rise in fund inflows to U.S. spot Bitcoin ETFs signals a potential positive turn for the market, especially with significant year-end crypto purchases,” said market observers.
The evolving nature of the market indicates the ongoing quest for stability. Persistent challenges in breaking the $90,000 barrier for Bitcoin reflect potential continued selling pressure. However, the firm footing of the crypto market’s overall value, coupled with select altcoin upticks, underscores sustained investor interest. Lower trading activity might dominate as the year ends, but forthcoming macroeconomic indicators and ETF updates could play pivotal roles in shaping the forthcoming market direction.
