Cryptocurrency Market Declines Amid Low Volume and Anticipated Volatility

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Cryptocurrency Market Declines Amid Low Volume and Anticipated Volatility

Cryptocurrency markets are witnessing a decline on a low-volume day, with significant drops in transaction volumes and active addresses. Analysts warn of potential corrections in Bitcoin’s price, possibly dropping to $75,000 if it loses key support, amid expectations of continued volatility into 2025.

Cryptocurrency markets exhibited a downward trend on a notably quiet Monday with low trading volumes. According to IntoTheBlock, there was a significant decline in large transaction volumes, which fell by 20.6%, alongside a slight decrease in daily active addresses by 0.02%. Additionally, high-value transactions (over $100,000) dropped from 8,435 to 7,495, while netflows on exchanges diminished significantly by 246.9%. Furthermore, Coinglass reported that over the past 24 hours, 100,183 traders experienced liquidations totaling $293.65 million.

On a positive note, data from Santiment revealed a rise in the number of non-empty Bitcoin wallets, which has increased by 27% over the past two years, while Ethereum saw a remarkable 47% surge in active wallets. In terms of investment developments, Foresight Ventures made headlines with a $55 million investment in The Block aimed at enhancing crypto media. Additionally, MicroStrategy has expanded its Bitcoin holdings by acquiring 5,262 BTC, now totaling over 444,000 BTC.

Financial analysts provided insights into Bitcoin’s price movements. CoinDesk’s Senior Analyst, James Van Straten, cautioned that Bitcoin’s continued price decline may see it drop below the critical support level of $90,000, potentially leading to a plunge to $75,000. This scenario would reflect a 30% pullback within the current bull market. Daan Crypto Trades echoed similar sentiments, emphasizing that choppy price action is typical for Bitcoin as the year closes. He expects this trend of volatility to persist until the New Year, when liquidity is anticipated to improve, enabling stronger price movements. The Kobeissi Letter further predicted a possible correction for Bitcoin, citing historical trends indicating that Bitcoin prices lag behind the global money supply changes. With a recent decline of $4.1 trillion in the money supply, Bitcoin could face a reduction of up to $20,000 in the weeks ahead, indicating a potential pause in its rally.

Overall, the cryptocurrency market is currently characterized by declining volumes and heightened volatility as traders brace for adjustments in Bitcoin’s price dynamics going into 2025.

The cryptocurrency market is known for its significant fluctuations and volatility, driven by investor sentiment, global economic factors, and regulatory developments. On days of low trading volume, price actions tend to be more pronounced, often leading to unpredictable shifts. Critical support and resistance levels play an essential role in predicting market movements, particularly for leading currencies like Bitcoin and Ethereum. The recent investment trends, such as Foresight Ventures’ support for crypto media and MicroStrategy’s relentless accumulation of Bitcoin, indicate a growing institutional interest in the cryptocurrency space despite market uncertainties.

In conclusion, the cryptocurrency markets experienced declines amid low trading activity, with notable decreases in transaction volumes and active addresses. Analysts provided warnings about potential corrections in Bitcoin’s price, citing historical trends and recent shifts in the global money supply. The general sentiment suggests that traders should anticipate choppy price movements as the year concludes, with a potential for recovery in liquidity and clearer trends in the new year.

Original Source: www.benzinga.com