The cryptocurrency market suffered a major drop in November, after bitcoin and other major currencies collapsed by more than 10 percent.
The drop wiped out billions from the crypto market, and came less than a week after bitcoin hit a record high of more than $69,000.
Bitcoin has regained some of its value after dropping below $60,000, but has since fallen back again. It is currently around $57,100.
This means that Bitcoin lost about 18 percent of its value in about two weeks.
Ethereum, Solana, Ripple, Cardano, Dogecoin, and Shiba Inu all followed suit, dropping by similar amounts.
Why did the cryptocurrency market crash?
A number of factors likely contributed to the collapse.
One of the main reasons is the US Securities and Exchange Commission (SEC) rejecting the ETF, which is likely to see billions flowing into the cryptocurrency market.
China has also stepped up its crackdown on bitcoin mining, which helped cause the latest crash earlier this year.
China’s National Development and Reform Commission said Tuesday that it will study “punitive electricity prices” for some digital currency miners in the next phase of its crackdown.
The dollar is up against other fiat currencies this week, but it also appears to be strengthening against cryptocurrencies.
This is partly due to higher interest rates, which could lead to lower inflation.
Twitter CFO Ned Segal also made negative comments about the cryptocurrency, which may have helped influence the market.
He said that investing money in crypto assets is “meaningless” at the moment.
Moreover, there is also what has become the natural cycle of cryptocurrencies. People tend to sell their assets when they reach record levels, as happened last week, and big sales can cause value to drop.
Cryptocurrency price predictions
Matthew Depp, COO and co-founder of Stack Funds, told CoinDesk that bitcoin may continue to lose value.
“We have seen some bigger selling on Bitfinex as well as new short positions being opened,” he said.
“While liquidations are very low so far by historical benchmark and funding rates are near flat, we could see a further lull in BTC in the short term as the momentum starts to stall.”
However, many analysts are still very optimistic about the long-term future of the cryptocurrency.
Dutch analyst PlanB suggested that previous forecasts for bitcoin to reach $135,000 in December were “still running.”
The group found success predicting the growth of the cryptocurrency in the past.
A growing number of analysts are predicting that Ethereum will eventually overtake Bitcoin as the world’s largest cryptocurrency.
“I definitely think there is a really good chance for Ether to outpace Bitcoin. I wouldn’t be surprised if it happened during the cycle,” said Rahul Rai, co-head of neutral marketplace at BlockTower Capital. from the inside.
“It is very difficult to predict when this cycle will end. What I do is the middle of next year.”
He added, “Ethereum is trying to solidify the bars of all global finance going forward, and this is a much bigger market, if it succeeds.
“If it really works, and if the thesis is implemented, the market capitalization will capture trillions of dollars in global activity.”
Should I invest in cryptocurrency?
People invest at their own risk and cryptocurrencies are not regulated by the British financial authorities.
All cryptocurrency investments are risky, but meme coins like Shiba Inu are especially volatile, and you should be prepared to lose whatever you invest.
The Financial Conduct Authority (FCA) warned in January: “Investing in crypto-assets, or investments and related lending, generally involves an extremely high risk of investor money.
“If consumers invest in these types of products, they should be prepared to lose all of their money.”
Susanna Streeter, Senior Investment and Markets Analyst, Hargreaves Lansdown previously outlined the risks he faces I.
“In addition to being highly volatile, most cryptocurrencies are unregulated, which not only adds another layer of uncertainty, but also means that investors have little or no protection against fraud,” she said.