Bitcoin slipped below the $42,000 mark for the first time in a week, signaling a temporary setback, while the recent surge in meme-inspired cryptocurrencies displayed signs of tapering off.
The leading cryptocurrency experienced a dip of up to 4.3%, landing at $41,656 on Tuesday in New York. Smaller tokens like Solana and Avalanche, which had seen notable rallies in recent weeks, took a harder hit, plummeting over 10% each.
Jaime Baeza, CEO at AnB Investments, cautioned about potential volatility in the week due to year-end flows, impending options and futures expiries, and the holiday-induced thin market liquidity. “The impending expiration of BTC options on Dec. 29 is our primary focus,” added Greg Moritz, co-founder at AltTab Capital, noting historically significant volatility on such expiration days.
Bitcoin’s meteoric rise of over 150% this year largely hinges on expectations of the US Securities and Exchange Commission’s imminent approval for the first-ever exchange-traded fund directly investing in the digital asset. The market anticipates clarity on this front by Jan. 10, a decision widely viewed as a catalyst by crypto enthusiasts.
Concurrently, considerable surges were witnessed in meme-based coins like Dogwifhat and emerging non-fungible tokens (NFTs). Despite skyrocketing over 1,000% in mere days and trading at fractional values, the excitement has waned, with Dogwifhat declining around 30% and Bonk approximately 15%. This decline indicates a cooling-off period after the recent euphoric upswings.
