The leading cryptocurrency Bitcoin and altcoins have experienced a sharp decline in the last 24 hours. While BTC fell by up to 6% to below $60,000, altcoins also experienced double-digit declines.
At this point, Ethereum (ETH) fell by a large margin of about 8.4% to $2,467, while Solana (SOL), one of the top 10 cryptocurrencies, fell by 7.4% to $147.5; and Dogecoin (DOGE) fell by 6.5% to $0.099.
There is No Single Reason for the Fall! Bitcoin May Continue to Fall!
While there is much speculation about the reasons for the decline, analysts believe that Bitcoin's recent decline is due to multiple factors.
Speaking to The Block, BTC Markets analyst Rachael Lucas said that Bitcoin’s drop below $59,000 was due to multiple reasons rather than a single one.
At this point, Lucas noted that the decline was due to multiple factors, including the oversold US Dollar Index (DXY), portfolio adjustments, and seasonal effects such as the “September Effect” that has historically affected market performance.
“There is no single reason for today’s decline in crypto markets, but it appears to be a combination of factors.
Technical indicators show that the US Dollar Index (DXY) is oversold on the daily chart, suggesting a potential recovery in the dollar, which has traditionally led to downward pressure on risky assets like cryptocurrencies.
Apart from this, the ‘September Effect’ has traditionally led to Bitcoin and crypto markets underperforming due to portfolio rebalancing and heightened caution ahead of the US elections.”
Rachael Lucas recently warned that if Bitcoin continues to trade below its 50-day moving average, a key technical level, the price could drop to around $56,000 in the near term.
*This is not investment advice.