Is the queen of crypto-currencies calming down after a week’s rise? The Bitcoin (BTC) price plummeted overnight, dropping -8% in the space of a few hours. Here’s an update on what’s happening this morning.
The price of Bitcoin (BTC) plummets overnight
While the Bitcoin price was still above $44,000 last night, it took a sudden plunge, hitting $40,000. In the space of around 5 hours, it will have lost -8% :
The price of Bitcoin (BTC) plummets on Sunday night
The world’s largest cryptocurrency has since recovered, and this morning is trading at around $42,000. It is, however, showing more volatility than over the weekend.
The story is similar for altcoins. Over the past 24 hours, Ethereum ETH has fallen by -5%, Ripple XRP by -6% and Solana SOL by -5%. Binance’s BNB is stalling at -3%. Over the year, however, BTC is up +145%.
How to explain this sudden drop?
At the end of last week, several analysts were noting that the market was “overheating”, and predicting an imminent correction. Bitcoin’s price is now back in the range that emerged over the past week, between $40,000 and $44,000.
There may be several reasons for the drop in Bitcoin’s price. On the one hand, unemployment statistics were better than expected in the United States, slightly reducing the likelihood of the Federal Reserve cutting its key rates. In return, stocks such as gold and Bitcoin have fallen.
Or it could simply be a case of profit-taking before the end of the year. Investors believe that the BTC price has reached its peak before the end of the month. As we’ve just seen, several analysts have noted that Bitcoin has enjoyed its eighth consecutive week of gains, and that these have been particularly strong:
Bitcoin just closed it’s 8th green weekly candle in a row.
This week’s candle was a monster.
When correction, sir? pic.twitter.com/xxWjTxxLLr
– The Wolf Of All Streets (@scottmelker) December 11, 2023
This correction was therefore expected, and the question will be whether the Bitcoin price will close this week higher, or whether it’s a pause in a market that has been very optimistic over the last two months. Indeed, one positive forecast follows another in recent weeks, with Standard Chartered forecasting that BTC will exceed $100,000 by 2024.
