Bitcoin and cryptocurrencies have crashed this week, with around $1.5 trillion wiped from the combined cryptocurrency market price since November.
The bitcoin price has dropped under $35,000 per bitcoin this week with ethereum and other major cryptocurrencies also falling sharply. The ethereum price has crashed to around $2,400, down from almost $5,000 late last year—with JPMorgan issuing a serious ethereum price warning.
Now, as bitcoin, ethereum and some other top ten cryptocurrencies continue to struggle, ethereum rivals BNB and solana, Ripple’s XRP, stablecoin network Terra’s luna and the meme-based dogecoin and shiba inu have rallied, each adding between 2% and 7% over the last 24 hours.
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The major crypto market is being led higher by Terra’s luna, up 5% on this time yesterday. Luna is one of the best performing cryptocurrencies over the last year, adding a staggering 7,500% to its price since January 2021.
Meanwhile, dogecoin, a bitcoin rival backed by Tesla’s Elon Musk, has added almost 4% and climbed back into the crypto top ten, as measured by price data site CoinMarketCap. Shiba inu, a doge-based rival memecoin, has also jumped since this week’s crypto crash, adding over 7%. Further down the crypto market charts, Crypto.com’s cro and Cosmos’ atom have both added around 8%.
Despite the steep crypto price slide this week, many crypto market watchers think the bitcoin price may have now bottomed.
“We expect BTC to find a bid around the 35K mark, close to 50% from the top. In the short term,” Pankaj Balani, the chief executive of Delta Exchange, said in emailed comments. “We can bounce to challenge the $45,000-$50,000 zone but the overall outlook remains bearish as liquidity remains tight.”
This week’s crypto price crash came as global stock markets fell sharply, with the tech-heavy Nasdaq falling into correction territory as investors face up to the reality of a more hawkish Federal Reserve.
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“As more investors, institutional or retail, adopt cryptocurrencies, the more the crypto market correlates with the traditional market,” Konstantin Boyko-Romanovsky, the chief executive of crypto platform Allnodes, said via email, adding the crypto market’s “correlation with the stock market should give investors confidence that blockchain technology will only develop further, and its mass adoption is underway.”
Bitcoin, ethereum and other cryptocurrencies are braced along with stock markets for the Federal Reserve’s January meeting, scheduled for Tuesday and Wednesday this week. Fed chair Jerome Powell will give a press conference on Wednesday afternoon after the policymaking Federal Open Market Committee releases its statement.
Investors are closely watching for clues on how much the Fed will raise interest rates this year and when it will start with economists expecting a quarter-percentage-point March rate hike.