❗️Why is the cryptocurrency market declining in December 2024: what is happening and what should investors do?
December 2024 brought significant losses to the cryptocurrency market. Major assets such as Bitcoin ($BTC ) and Ethereum (ETH), etc., sharply declined, causing panic among traders. Let's analyze the main reasons for the collapse and determine how investors should act in the current situation.
——————————————————————————-
❗️Reasons for the Market Decline
1. Excessive Leverage:
Many traders used margin positions with high leverage, leading to mass liquidations after price declines. In recent days, the market has lost over $430 million, which intensified the collapse effect.
2. Regulatory Uncertainty:
Expectations for the approval of a spot Ethereum ETF by the SEC have not been met, causing disappointment among institutional investors. The lack of progress on this issue has pushed the market down.
3. Withdrawals from Crypto Funds:
Data shows significant outflows from Bitcoin ETFs and other crypto funds. Investors are taking profits after previous rises, increasing pressure on the market.
4. Macroeconomic Factors:
Global economic issues such as inflation, rising interest rates, and instability in traditional markets are also impacting cryptocurrencies, which remain a high-risk asset.
——————————————————————————-
Advice for Investors
💡 Long-term Perspective:
Despite short-term declines, Bitcoin and major altcoins such as $ETH and $LINK remain assets with strong fundamentals. History shows that the market often recovers after major downturns.
📈 Dollar-Cost Averaging (DCA):
Consider buying cryptocurrency in small amounts regularly. This helps to reduce risks associated with volatility.
🔍 Analyze the market:
Keep an eye on news about regulations, technological updates in blockchains, and macroeconomic data. These factors will determine the market direction in the coming months.
——————————————————————————-
Conclusion
The current correction in the cryptocurrency market is temporary, especially considering upcoming events such as potential technological updates in blockchains and increasing institutional interest, as well as Trump's inauguration. It is important to remain calm and understand that the market always moves cyclically. 🚀
