Trees were trimmed, presents wrapped, and Christmas festivities were at hand when the cryptocurrency market went into a free fall. Investors awoke from their winter’s nap last Friday to a portfolio painted red, an unwelcome presentation of the rosy holiday color that has become a hallmark of the Christmas season. But with the passing of Christmas, this red has turned to a holly green, as the market seems to have found its footing following the holiday bleeding.
The Bears Go into Hibernation
It may be safe to call the most recent (and hefty) market correction over. Investor confidence is building as the market continues its climb out of a bearish slump that left many portfolios less than cheery on the eve of Christmas festivities.
At the lowest point of the correction, Bitcoin fell to as low as US$11,000, and the rest of the market didn’t fair much better. With a few exceptions, most currencies sported red candles during the dip. Litecoin, for example, fell 50% from its recent all-time high, going as low as US$187. Ethereum didn’t get hit quite that hard, but it still bottomed out at US$560, down 35% from its US$870 all-time high. In the pits of the bloodbath, crypto’s total market capitalization was US$422 billion, a breathtaking decline from its all-time high of US$650 billion just a week ago.
In spite of this downtrend, the market stabilized and now appears to be on an upswing. Crypto’s total market capitalization is steadily approaching US$600 billion once again, and was valued at US$580 billion at press time. Currently, Bitcoin is back above US$16,000, with Bitcoin Cash approaching US$3,000, Ethereum pushing US$770, and Litecoin vying to jump back over US$300.
Ebbs and Flows
This correction came in the wake of a bull market that began in November and lasted throughout the majority of December. Over that time, we saw cryptocurrency’s overall market cap increase threefold, running up from US$200 billion in the beginning of November to its high of US$650 billion at the bull market’s peak. With this runup, the market’s top 10 experienced substantial gains, each and every one transcending all-time high after all-time high. This success was widespread, as most coins in the market only went up over the two-month period.
The recent price drop was an anticipated and healthy response to November and December’s stratospheric runup, and some investors took the dip as a buying opportunity. For those that have been in the market for some time, this dip was a sigh of relief, an opportunity to get in at discount prices, and nothing to sweat. For those newer to the game, it may have been a source of stress, a harsh first lesson in market volatility, or perhaps even a reason to panic.
Regardless of whether you’re old or new, take solace in the fact that the market seems to be healthy going into the new year, and that the bubble isn’t ready to pop yet. As with the correction that preceded it, this bounce-back is to be expected and indicates that investor confidence hasn’t waned.
This article was curated from Google News. You can read the original article here.