Cryptocurrency prices tumbled today with Bitcoin dropping below $44,000, to its lowest level since the flash crash in December. The world’s most popular and largest digital token by market capitalization was trading by nearly 7% at $43,167. Bitcoin, which is notorious for its volatility, has lost more than $25,000 since hitting a record high of $69,000 in early November.
“Bitcoin corrected sharply and fell to the $43.5K level shortly after the Federal Reserve reconfirmed its interest rate hike plans. Cryptocurrency markets experienced massive selling during this period. The 4-hour trend for BTC indicates a bottom breakout of the pattern. Next support for Bitcoin is expected to reach $40K.”
Ether, the coin linked to the Ethereum blockchain and the second largest cryptocurrency, is also down more than 8% at $3,494, according to CoinDesk. On the other hand, Dogecoin price fell by about 6% to $0.15, while Shiba Inu price was down more than 7% to $0.000030. Meanwhile, Binance Coin stock is also up nearly 7% at $476.
Meanwhile, other digital tokens such as Solana, Polygon, Uniswap, Stellar, Cardano, XRP, Tether and Litecoin have also been trading with cuts in the 5-7% range over the past 24 hours. The global cryptocurrency market capitalization, led by the cryptocurrency decline, fell 6% to $2.22 trillion, according to CoinGecko.
Ethereum and other altcoins followed Bitcoin for a sharp correction. Ethereum fell below $3,500 before recovering again and settling above that level. On the daily time frame, the trend of ETH can be seen breaking below the falling wedge pattern. The immediate support is expected to reach the $3,400 level.”
Digital asset manager CoinShares said in a report that the last week of 2021 saw a third consecutive week of investment outflows from crypto funds. Total outflows from the sector amounted to $32 million last week. Total assets under management ended the year at $62.5 billion in 2021 versus just $2.8 billion at the end of 2019.
Ethereum inflows doubled to $1.3 billion in 2021 from $920 million in 2020. By contrast, bitcoin saw a 16% increase to $6.3 billion.
The recent volatility in cryptocurrency comes amid a volatile period for the financial markets. Rising inflation is forcing central banks to tighten monetary policy, threatening to reduce the liquidity tailwind that has lifted a wide range of assets.
(with input from agencies)
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