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The world of cryptocurrency is going crazy at the time of writing. Many of the biggest assets – including bitcoin, Ethereum, Solana and Ripple’s XRP – have fallen by about seven percent or more, causing the entire industry to lose billions over a 24-hour period.
Bitcoin and Other Assets Have Fallen Into Oblivion
Traders should be used to this kind of behavior from bitcoin and its altcoins cousins. Sadly, very few are mentally prepared for crashes of this magnitude, meaning whenever they occur, panic and anxiety are likely to ensue. Right now, bitcoin has fallen below $60,000 for the first time since the beginning of November, though it is slowly building its way back up the ladder.
Thus far, about $400 billion has disappeared from the crypto market, meaning the industry is no longer enjoying a market cap of more than $3 trillion. Alex Kuptsikevch – a senior financial analyst at FX Pro – explained in an interview:
Cryptocurrencies have experienced a sell-off, taking major cryptos below recent short-term support lines. A stronger dollar against major currencies and a desire to lock in profits triggered a strong, but relatively even selloff overnight. The cryptocurrency market capitalization collapsed 7.5 percent over the past 24 hours to $2.66 trillion, breaking a long consolidation.
The crash comes after bitcoin saw its first major upgrade in approximately four years. Known as Taproot, the upgrade is slated to make bitcoin more comparable to Ethereum, which has become seriously popular in recent years amongst developers given its abilities with smart contracts. Bitcoin, thanks to Taproot, is slated to become more secure, while transactions will be less expensive, and the network will be more compatible with smart contracts.
The upgrade initially caused bitcoin’s price to spike to about $68K per unit, though at press time, a crash is setting in. Mikkel Morch – executive director at crypto hedge fund ARK36 – stated:
Yet again, bitcoin has done what it does best; defy expectations. After hitting an all-time high near the $69,000 level last week, the overall investor expectation was that the trend would immediately continue.
Despite all this, Morch was quick to assure his followers that the overall bullish sentiment that has been permeating the market has not died down fully yet. He says:
At the moment, the overall bullish market structure remains largely intact.
Maybe We Shouldn’t Worry Too Much Yet…
Kuptsikevch also offered some additional words for traders, claiming:
The cryptocurrency fear and greed index has so far failed to react to yesterday’s spill in the sector, ending up at 71, still in greed territory, which bears little resemblance to the sentiment in the markets as of this morning. The $57,500-$60,000 area focuses on the 50-day moving average and the 61.8% retracement level from the rise since late September. If bitcoin does not get solid buying support in this area, it could open the road down to $52,000.