While they were at their best last week, two major cryptocurrencies are undergoing a correction starting this Sunday.
Since this Sunday, we have seen a correction in the cryptocurrency market, especially for the two main cryptocurrencies in terms of capitalization, Bitcoin and Ether.
Our impression is that investors are clearing their positions in these assets to focus on the smallest cryptocurrencies in terms of capitalization, altcoins. Because actually from the party altcoinsthe atmosphere is festive: solana cryptocurrency gained 18% for the week, cardano 46% for the same period or even avalanche 86% depending on CoinMarketcap.
“Taking Profits”
The movement was driven around Ether, with investor concerns about the whale moving just over 39,000 Ether to the Kraken platform. On Monday evening, Ether fell to its lowest level in several days, around $2,100.
Similarly, when Bitcoin peaked above $44,700 last Friday, it suffered two major pressures. On Sunday night, the asset fell around $42,000, and this Monday, Bitcoin touched $40,300. The calculation is quick: the asset lost 9% in less than 24 hours.
“The reasons for this sudden drop are not clear, but it could be profit taking by some investors after a significant increase in price over several months. Bitcoin is currently up 146% over 12 months. No wonder there is some overheating during it.” price spike,” points out Simon Peters, market analyst at eToro.
The temptation to take profits remains, we are in a very good end to the year on Bitcoin, which is still gaining 16% in one month and 60% in 3 months. However, this strong volatility proves that we are in a corrective movement that may not be over, based on profit-taking but also on fears, while the starting week will be rich with announcements from central banks, the European Central Bank (ECB) to the Federal Reserve ( Fed). We have seen that the recent rise in cryptocurrencies was also largely a response to the weak dollar and the US interest rate outlook.