Bitcoin and Altcoins Crash Ahead of Christmas – Is This a Correction or More?

The pre-Christmas mood on the crypto markets has been abruptly disrupted: Bitcoin, the leading currency, has fallen into a downward spiral and is trading

Bitcoin fell short of the $100,000 mark on Friday, while altcoins like Ethereum, Solana and Dogecoin dropped by 10 percent or more.

Is this a correction after weeks of rallying or more?

The pre-Christmas mood on the crypto markets was abruptly disrupted: Bitcoin, the leading currency, fell into a downward spiral and was trading at around $95,000 on Friday morning – the series of new all-time highs of over $100,000 thus ended.

Since yesterday evening, altcoins also fell one after the other, Ethereum (ETH) slipped 10 percent into the red, Solana (SOL) 14 percent, Dogecoin was down 17 percent on the day and Cardano (ADA) 14 percent.

Several reasons could have caused the surprising downturn:

– The decision of the US Federal Reserve to cut the key interest rate by 0.25 percent was expected and such interest rate cuts actually support the price curve of Bitcoin. But the Fed also indicated that inflation in the US remains a problem and that the key interest rate will not be reduced quickly in 2025. This macroeconomic outlook also pushed traditional stock markets slightly into the red, from which Bitcoin and Co. can rarely decouple.

– US altcoins Solana, Cardano and Dogecoin, Elon Musk’s favorite, had gained massively after Donald Trump’s election victory – profit-taking and possible overvaluation of ADA, SOL, DOGE and others are part of the puzzle.

– Bitcoin ETFs in the US had a terrible day on Thursday. Data from SoSo shows that the streak of 15 trading days of uninterrupted capital inflow for Bitcoin ETFs came to an abrupt end. $680 million was withdrawn from Bitcoin ETFs in one day – a negative record since their debut in January.

– MicroStrategy’s aggressive strategy for Bitcoin purchases raises concerns about whether the MSTR share is still fairly valued or turns out to be a systemic risk for the BTC price development.

– There are also considerable doubts as to whether the US government Bitcoin reserve promised by Donald Trump will become a reality – this plan, along with the Bitcoin ETFs, is considered to be the trigger for the recent Bitcoin boom.

Conclusion: Difficult end of the year for Bitcoin and Co. – Crash feared

When analyzing the daily losses in Bitcoin’s price, it seems like a confluence of several factors got the ball rolling. The fact that altcoins from Ethereum to Solana to Dogecoin and Cardano are collapsing even more is no surprise, but rather underlines the status of BTC as a leading crypto currency.

By the way, we had an infographic in our program just yesterday that revolves around possible warning signs of a Bitcoin crash.

For the moment, investors and other market participants hope that the relative Bitcoin weakness can be interpreted as a price correction and not a sign of a negative series. But the period between Christmas and New Year is complicated, with traditional exchanges for Bitcoin ETFs being closed on many days. Nervousness today can turn into panic tomorrow – long-term Bitcoin investors are familiar with these dynamics and volatility. But they can also console themselves with the fact that Bitcoin has always returned stronger from such situations and that altcoins are riskier than BTC anyway.

This article was first published on BlockBuilders. A third-party contributor translated and adapted it from the original article for readers of Born2Invest. In case of discrepancy, the original article will prevail.

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