Why did the crypto market drop?

Why Did the Cryptocurrency Market Experience a Decline?

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In 2024, the market started on a pretty good note after the worst of 2022’s “crypto winter.” Most cryptocurrencies, led by Bitcoin (BTC), began to recover.

The market value of all cryptocurrencies is $2.62 trillion as of March 11, 2024.

Even though Bitcoin hit an all-time high of $69,000, most other cryptocurrencies seemed to be selling well below their all-time highs.

The market moves back and forth from left to right, but it stays within a small range and trades in smooth waves.

Two years ago, the collapse of Terraform Labs’ TerraUSD (UST) and Luna (LUNA) token projects and Sam Bankman-Fried’s FTX crypto exchange shook the industry to its core. However, 2024 has brought a breath of fresh air and an optimistic outlook that has been good for major cryptocurrencies like Bitcoin and Ethereum (ETH).

The crypto market can calm down macroeconomic storms.

Even so, the market has slowly gone from being scared to being greedy and is now balanced. The crypto market isn’t being affected by rising prices in the US or the lack of cash because of it; instead, it seems to be stable.

In the past, when the US Federal Reserve decided on interest rates for the dollar, it had a huge effect on the cryptocurrency market.

In July, BTC went over $31,000 for the first time in a year. The next month, it fell to $27,000 after the Federal Reserve chose to keep interest rates on USD loans high and alone.

But since October 2023, Bitcoin and the cryptocurrency market as a whole have shown huge signs of recovery. At that time, the most valuable cryptocurrency was selling around $34,500.

At the moment, $323.65 billion worth of crypto has been traded on the market. The two biggest cryptocurrencies by market cap, Bitcoin (BTC) and Ethereum (ETH), are still leading the market and showing signs of rebound.

No matter what the Russia-Ukraine war, the Terra-Luna crash, the FTX collapse, or the global crypto tax rules have been, the market has been able to weather them all.

$1.19 billion in crypto was sold after Bitcoin hit an all-time high.

People sold more than $1.1 billion worth of cryptocurrencies in the hours after Bitcoin’s price reached its highest point. Most of these liquidations were done by people who had their tokens for more than two years, waiting for them to make money.

Altogether, 318,221 tokens were sold in less than 24 hours after BTC hit the desired $69,000 mark.

There has also been a supply shock because of the desire for Bitcoin through ETFs. When you add in the upcoming halving event, which will cut the supply of Bitcoin in half, demand is sure to go up even more while supply keeps going down.

Traders are buying as many Bitcoins as they can before April when the block prize subsidy for miners will be cut in half.

Bitcoin is worth $66,456 right now, which is 0.3% less than it was 24 hours ago. Ethereum, on the other hand, is now worth $3,846—up 3.4% in the same time frame.

In the end, 2024 was a new start for the world of cryptocurrencies, which is now beginning to heal. Big Wall Street firms’ spot Bitcoin exchange-traded funds (ETFs) and the upcoming half of the Bitcoin network’s block reward have caused a huge demand for Bitcoin. This has helped drive BTC prices to monthly, then yearly, and finally all-time highs.

There is no question that the market has stood the test of time and reacted so strongly to the unknowns in global politics and the economy that it is still standing tall and strong.

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