After the hopeful stabilization of Bitcoin since December 23, when it increased from the tragic crash of $11,833 to the well-promising $16,133, another correction occurred to it. Since the afternoon December 27, bitcoin started losing in value, again, reaching the drop rate of about 12% just in the last 24 hours.
Notably, such a significant correction was faced by the whole crypto market in general. The value of the most of top-100 crypto coins has plummeted within the past 24 hours, except for Ripple, ICON, RaiBlocks, VeChain, and Enigma, which demonstrated a growth of up to 20%.
According to the CoinMarketCap, the most prominent cryptocurrencies listed top-15, apart from Ripple, have declined in value by 12% on average. Among them, there are Monero, Ethereum, Bitcoin Cash, Dash, Litecoin, IOTA, and others.
The total market capitalization of all the crypto coins was fixed at $621 billion on December 27. However, one night, as it might seem, changed everything. At the moment, the crypto market valuation is recorded at $540 million, meaning that the capitalization endured the pullback of nearly $81 billion amidst one day.
What Caused the Correction?
It can be surprising that there have not been traced any considerable factor that could have caused the recent decline. Nevertheless, as CCN reports, experts believe that the fall could have been caused by the unexpected rise of cryptocurrency’s prices, which occurred within the last months.
Probably, crypto investors have decided to review the existing digital coin market valuation after the skyrocketing of lots of them. In particular, such coins as Cardano have grown in price by over $10 billion. And this happened only several weeks after they were presented.
Regarding the total market capitalization, it is crucial to note that within just three last months it has increased by nearly $400 billion. Currently, the most significant cryptocurrency bitcoin on its own costs as much as the whole crypto market cost this year October.
Another reason for the drop could be that all the crypto coins are still being developed, which means that they are extremely unstable, so daily changes in their value are supposed to be a common thing.
What About Bitcoin?
When bitcoin endured a severe crush on December 22 (going down to less than $12,000), Fundstrat Global Advisors’ head of research Tom Lee in an interview with Bloomberg stated that such pullbacks are very “healthy” for bitcoin.
In an interview with CNBC Fast Money, Ari Paul, who is the co-founder and the info officer at Blocktower, emphasized that those who pile into bitcoin, should be ready both for corrections and its speedy recovery by huge margins as bitcoin’s nature is quite erratic.
“If bitcoin settles anywhere below $50,000 next year, it will expire worthless. But if bitcoin goes to $100,000, it pays 30 to 1 [30-fold]. Bitcoin is volatile. This is a hyper volatile asset. Bitcoin is up more than 1,400 percent this year. It also falls 30 percent almost every other month. These calls are a bet that if its volatile to the upside we can easily see over $50,000 next year,” said Paul.
So considering the trends in the cryptocurrency market, experts believe that the value of bitcoin and altcoins will recover, but with time.
Image Source: coinmarketcap.com