Crypto Market Takes Another Hit: Bitcoin and Ethereum Plunge

Bitcoin and Ethereum See Significant Drops

• Bitcoin fell below $86,000 before slightly recovering.
• Ethereum dropped over 7%.
• Other cryptocurrencies like Solana and Dogecoin also took a hit, continuing the downward trend from November.

Market Instability Persists

• October: A massive sell-off wiped out $19 billion in leveraged bets, just days after Bitcoin hit a record high above $126,000.
• November: Bitcoin lost nearly 17% of its value, marking its second-worst month of the year.

Experts Express Concerns

• Lack of support from institutional investors.
• Absence of buyers during dips.
• High leverage in the market leading to sudden and severe price swings.

Global Markets Feel the Pressure

• Asian equities faced a shaky start after a recent rally.
• The yen surged following hints of a potential rate hike by the Bank of Japan.
• Impact on the yen carry trade and risk assets, including crypto.

Market Structure Issues

• Heavily driven by retail investors, who react differently than institutional investors.
• Decentralized and often opaque nature of many exchanges makes it hard to track risks.
• Adds to the market's instability.