Bitcoin falls 4% despite recovery in traditional markets. Ethereum and altcoins also suffer significant drops.
This Tuesday, Bitcoin (BTC) fell 4%, reaching the US$35 mark and this decline occurred despite a notable recovery in the stock and bond markets, driven by an unexpected slowdown in inflation. Cryptocurrency markets, for other hand, appear to have been sidelined in this wave, with Bitcoin falling from nearly $36.600 to $34.970 in a short period, before stabilizing around $35.300.
Ethereum (ETH), another leading cryptocurrency, also suffered a setback, falling almost 6% and losing the level of US$2.000, which it had recently regained. Large-cap altcoins like Dogecoin (DOGE), Polygon (MATIC), and Tron (TRX) also saw drops in the 6% to 7% range. The CoinDesk Market Index (CMI), which tracks a wide range of cryptocurrencies, fell 4,5%, reflecting widespread losses in the market.
How are the markets behaving?
Meanwhile, traditional markets reacted positively to the more favorable-than-expected inflation data. The Federal Reserve (Fed), US central bank, is considering raising interest rates and even considering cutting them in the first half of 2024. This led to an increase in the Nasdaq and S&P 500 indexes, with the former rising more than 10% in November.
However, in the bond market, the 10-year Treasury yield experienced a dramatic drop of 20 basis points to 4,44%, a contrast to the 5% peak reached just three weeks ago. At the same time, the dollar index (DXY) fell 1,55%.
Boyaa Interactive Invests Heavily in Bitcoin and Ethereum
Despite the challenging session for cryptocurrencies, analysts at Grayscale, a renowned investment management firm, remain optimistic. They suggest that slower inflation and lower bond yields could, in the long term, support cryptocurrency prices. This outlook suggests that although the crypto market may be facing a turbulent phase in the near term, the potential for recovery and growth still remains.
How do analysts see the drop?
Analysts remain optimistic about the future of crypto. According to scholar James Seyffart, “Ok, we are approaching the deadlines for 3 spot #Bitcoin ETF applications. I want to get ahead of the curve because there's a good chance we'll see delay requests from SEC. Delays would NOT change anything about our opinions & 90% Odds for 19b-4 approval by January 10, 2024“, he commented in his profile on X.
