By gaining only 4 percent since the start of this year, Bitcoin (BTC) and other cryptocurrencies may be proving to be overrated investments.
Bitcoin’s price fell by more than 6 percent to its weakest level in six months on Friday, as there is growing uncertainty on the US economy that may make the Federal Reserve hesitant to reduce key interest rates in December.
The world’s largest cryptocurrency was trading at $97,190 at 0705 GMT, which is around its weakest level since May. It reached levels above $123,000 in August this year, which means its gains for the year will literally erased over the past days.
Ethereum, the second-largest cryptocurrency by market value, went down by about 9 percent to $3,220.
“The Bitcoin price action triggered a Death Cross on Sunday, November 16, after it’s 50-day moving average dipped below the 200-day moving average,” said analyst Lockridge Okoth in a commentary posted in Yahoo Finance.
“Historically considered a bearish technical signal, the event has sparked fresh debate among traders and analysts. The key question: does this mark a local bottom, or is a further drop looming?,” he added.
According to data from CoinMarketCap, the value of the global cryptocurrency market, including Bitcoin, plunged by about 6.9 percent in the past 24 hours to $3.26 trillion.
For its part, Bitcoin’s market capitalization decreased by 5.8 percent in the past 24 hours to $1.94 trillion. However, daily trading volume increased by about 50 percent to $111.1 billion.
Okoth, however, still sees hope that Bitcoin will recover in the next months, and advised investors to make strategic decisions.
“Meanwhile, medium-term projections indicate a 15–27 percent recovery gain over the next 2–3 months if BTC follows median historical behavior,” he said.
“The long-term upside remains plausible, but variability is high, highlighting the importance of combining technical, on-chain, and macro analysis for informed strategic decisions,” Okoth added.
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