Cryptocurrencies registered falls of up to 6.4% this Monday, in the run-up to New Year’s Day. In this scenario, the strength of the global dollar continues to put pressure on the prices of risk assets.
The price of bitcoin fell below $94,000, influenced by the strength of the dollar that affects risk assets such as cryptocurrencies, especially in the context of the upcoming inauguration of Donald Trump as US president at the end of January.
Furthermore, reduced expectations of interest rate cuts by the Federal Reserve (Fed) also contributed to the recent bitcoin price drop and other cryptocurrencies over the last month. In this sense, the traditional “Santa rally”, A bullish phenomenon typical of December, did not materialize as bitcoin accumulated a loss of 4% in the month. Currently, the cryptocurrency is trading well below its all-time high of around $108,000, reached on December 17.
In this context, Ethereum falls 1.75% to $3,300 while the rest of the altcoins lose up to 6.4% led by Cardano, Hedera (-6.1%), followed by Polkadot (-5, 7%) and Stellar (-5.6%).
Analysts Expect Bitcoin Price Volatility
Rania Gule, senior market analyst at XS.com, believes that the coming weeks could bring “unprecedented volatility and price movements that could redefine future expectations.” According to Gule, the high volume of contracts reflects an increase in market expectations regarding profit taking and risk coverage, which could set future trends.
The analyst also highlights that this period could inaugurate a new stage in the cryptocurrency market as we approach 2025. Gule urges investors to be vigilant as the expiration of large options contracts could trigger unexpected price movements. Although these changes can create significant opportunities, they also present significant risks.
“The market is at an inflection point, entering a more flexible and innovative phase“says Gule. She affirms that investors with clear and well-defined strategies will be the ones who best take advantage of the opportunities. According to her, cryptocurrencies continue to be a dynamic sector full of possibilities and challenges, where sudden changes can generate great risks or benefits.
Source: Ambito
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