Cryptocurrencies, including Bitcoin, faced a retreat on Monday, pulling back from recent 20-month highs, though still close to their peak amid an ongoing rally. The upcoming days hold important catalysts, notably the next Federal Reserve decision, likely to impact market sentiment.
Bitcoin saw a 5% dip over the past day, settling at $41,550, down from its recent heights around $44,500 last Friday. This surge was the highest for Bitcoin since April 2022, marking a substantial recovery from the bear market slump. The rapid rise has fueled suggestions of a potential new crypto bull market.
Market analyst Alex Kuptsikevich from FxPro highlighted a wave of profit-taking, notably in low liquidity, during Asia’s regular session, suggesting a significant exit from long positions. Despite this, the overall bullish trend seems intact, with potential for sustained growth if Bitcoin maintains above the $40,000 mark.
The recent crypto price surge has found support from various factors, including optimism surrounding the potential approval of the first spot Bitcoin exchange-traded fund by U.S. regulators. Additionally, positive macroeconomic conditions, anticipation of multiple Fed interest rate cuts next year, and the limited token supply have contributed to the market’s gains.
Beyond Bitcoin, other cryptocurrencies also experienced a downturn: Ether, the second-largest crypto, fell 7% to below $2,200. Altcoins like Cardano and Polygon saw drops of 9% and 8%, respectively. Similarly, memecoins like Dogecoin and Shiba Inu witnessed declines of 7% and 8%, respectively.