The decline of cryptocurrencies before the end of 2024 could be the result of several interconnected factors affecting the market. Here are the most prominent possible reasons:

1. Global economic factors

• Tightening monetary policies: If global central banks, such as the US Federal Reserve, continue to raise interest rates to control inflation, this reduces investors’ appetite for risk, including cryptocurrencies.

• Possible economic recession: Negative economic expectations could lead to liquidity flowing out of high-risk markets such as cryptocurrencies.

2. Regulatory pressures

• New laws and regulations: Governments and regulatory bodies in major countries such as the United States or the European Union may increase pressure on cryptocurrencies by imposing restrictions on trading or mining.

• Dealing with stablecoins: The increasing focus on stablecoins may create concerns about restricting their use or strictly regulating them.

3. Strategies of large investors (whales)

• Profit taking: Towards the end of the year, large investors sell part of their portfolios to take profits and rebalance their assets before closing the annual accounts.

• Market manipulation: Some large investors may drive the market down to buy currencies at a low price.

4. Annual audit of companies

• Reducing spending: At the end of the year, companies usually reduce their activity and divert funds to auditing. This leads to less liquidity in the market.

• Stopping support: If some projects stop or reduce their activity during the end of the year period, investors may temporarily lose confidence.

5. Technical factors related to digital currencies

• Market Correction: After any significant rise in currency prices, a natural correction occurs that causes prices to fall.

• Selling mined coins: Miners may increase sales to cover mining costs as profits decline due to market volatility.

6. Psychological and behavioral factors

• Investor fear: Concern about volatility or negative news causes investors to sell en masse, exacerbating the decline.

• Media influence: Negative news or warnings from market experts lead to a weakening of confidence in cryptocurrencies.

7. End of Market Cycles

• Cryptocurrencies go through price cycles that range between rise and fall. If we are at the end of a bull run, a fall is considered normal at this stage.

Conclusion

The decline of cryptocurrencies near the end of 2024 may be the result of a combination of economic, regulatory, and psychological factors. To understand the decline accurately, it is important to follow:

1. Global economic news.

2. Regulatory updates.

3. Market movement and data analysis.

If you are an investor, it is advisable to focus on fundamental and technical analysis and work with the principle of risk management.