Altcoins fall due to early profit selling, a warning signal about overheating in the futures market

Macroeconomics and financial markets

On the US New York stock market on the 24th, the Dow Jones Industrial Average closed 53.5 points (0.14%) higher than the previous day, while the Nasdaq index closed 4 points lower.

Crypto-asset (virtual currency) related stocks fell sharply, with Marathon Digital down 10.5% from the previous day, Riot down 5.8%, and Hut8 Mining down 12.3%.

CoinPost app (heat map function)

connection:10 major virtual currency stocks in the Japanese and US stock markets

Virtual currency market conditions

In the crypto asset (virtual currency) market, the Bitcoin price fell 1.9% from the previous day to 1 BTC = $42,599.

BTC/USD daily

While expectations surrounding Bitcoin spot ETFs (exchange traded funds) have pushed up the market price, many are taking a cautious view.

Data analysis company CryptoQuant predicts that if the ETF is approved by the US SEC (Securities and Exchange Commission), “sell-the-fact” (buy on rumors, sell on facts) leading to profit-taking will become stronger, and 1 BTC = $32,000 could plummet. It sounded the alarm that there was a sexual problem.

The unrealized gains of short-term Bitcoin holders have reached +30%, which is a historically high level before price adjustments. Additionally, increases in miner transaction fees often precede a market price correction phase, and miner selling has been on an upward trend recently.

During bull market corrections, the price of Bitcoin tends to return to the price realized by short-term holders.

An increase in the number of transactions on the Bitcoin network can cause transaction fees to rise because there is a limit to the number of transactions that can be processed per block.

According to data from IntoTheBlock, BTC transaction fees have reached new highs due to increased interest in Ordinals (Inscriptions). When there is too much traffic, unconfirmed transactions accumulate in mempool, but if there is an incentive to set high fees and process transactions quickly, the average fee tends to rise.

Analysts at Bloomberg Intelligence believe there is a 90% chance of approval by ArkInvest’s final approval date of January 10, 2024.

Data source: Bloomberg

On the other hand, in the long term, it is being pointed out that there is a possibility that a huge amount of new capital will flow in due to the impact of ETF approval. CryptoQuant said in a report in October this year that the cryptocurrency market’s market capitalization could soar to $900 billion.

connection:Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks

connection:A professional explains the year-end Bitcoin market as expectations for ETF approval increase | Contributed by Virtual NISHI

altcoin market

Stocks that were soaring, such as Solana (SOL) and Polygon (MATIC), have suffered a rebound. On the 28th, $32.8 million worth of SOL was transferred to Binance.

As the funding rate of altcoins increases, there are many voices of caution.

Funding is absolutely brutal, buckle up the reaper is here. Hope you captured profit before the LONG HUNT pic.twitter.com/eR7ln8geyb

— David Alexander II (@Mega_Fund) December 26, 2023

Due to the impact of the decline, leveraged long positions were forced to take a loss cut (forced liquidation).Solana-based meme tokens have also plummeted.

Altcoin Sherpa pointed out the risk of dead cat bounce. Although there is a possibility that the economy will ride an uptrend again, it suggested that the correction phase will be prolonged.

$BONK some sort of dead cat bounce coming I think.

When this happens, I’m guessing other SOL memes have some sort of mini run as well; those will be good times to get out of your bags during that time.

I do believe that BONK will have another strong run but it could take a… https://t.co/lsqVO7TgVD pic.twitter.com/vL3DjEjzBX

— Altcoin Sherpa (@AltcoinSherpa) December 28, 2023

BONK is currently at a +247% level compared to the previous month, but it is down 26.6% compared to the previous week, and profit-taking selling is dominant.

BONK/USD

connection:Is it the beginning of the airdrop season in 2024? VC investment trends indicate signs of a rush to issue tokens

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In addition to important news about virtual currencies, you can also see at a glance exchange information such as the dollar yen and price movements of crypto asset-related stocks in the stock market such as Coinbase.

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— CoinPost (virtual currency media) (@coin_post) December 21, 2023

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