Bitcoin and Leading Cryptocurrencies Face Sharp Decline; Market Remains Bullish

1 views 7:40 am 0 Comments December 19, 2023

Bitcoin and Leading Cryptocurrencies Face Sharp Decline; Market Remains Bullish

The cryptocurrency market took a stumble on December 18, with Bitcoin grappling to sustain its value above $41,000. Leading cryptocurrencies recorded a drop of up to 10%, with Avalanche (AVAX) spearheading the decline, followed by Cardano (ADA), Solana (SOL), and Ripple (XRP). This downward trend concludes an eight-week-long winning streak for Bitcoin, its longest since 2017.

A Shakedown in the Crypto Market

The losses are attributed to investors cashing in on their recent significant gains. Over $800 million in Bitcoin was transferred into exchanges in the preceding week, symbolizing readiness to sell. Despite the downturn, the Crypto Fear & Greed Index indicates that the market sentiment remains ‘highly greedy,’ suggesting the potential for further corrections but also a belief in Bitcoin’s future price rise.

Factors Fueling the Bullish Outlook

Contributing to the bullish sentiment are elements such as the potential for spot Bitcoin Exchange-Traded Funds (ETFs), and a milder stance from the Federal Reserve (Fed). The Fed’s recent dovish turn, indicating three interest rate cuts in 2024, has been crucial for the cryptocurrency market. The consensus leans towards a possible rate cut by the Fed as early as March next year.

Altcoins Defying the Trend

Despite the downturn, several lower-cap altcoins and meme-coins have managed to make notable gains and retain their weekly profits. Bonk (BONK), Internet Computer (ICP), and Helium (HNT) have led this pack with impressive growth.

Resurgence of Blockchain-Based Private Loans

Amid the ongoing turbulent scenario in the cryptocurrency market, there is a surprising resurgence in blockchain-based private loans. Since the beginning of the year, active private loans have surged by 55%, totaling around $408 million by November 28. Blockchain protocols offer transparency and efficiency, with advantages such as cost reduction, faster funding, and effective loan management.