Christmas Lull? Major Cryptos Drop as Investors Take Profits

The cryptocurrency market is experiencing a notable lull as it approaches Christmas 2024, with major coins showing a lackluster performance. Despite Bitcoin reaching an all-time high of over $108,000 just six days ago, it has struggled to stay above the $100,000 mark and is currently trading at around $95,904. Over the past week, Bitcoin has seen an 8.3% drop, reflecting broader market weakness.

Ethereum, XRP, and other high-cap altcoins have followed a similar trend. Ethereum has fallen by 15.6% in the last seven days, currently priced at $3,339. XRP has declined by 7.8% to $2.2, and Dogecoin, the leading meme coin by market cap, has experienced a 21% drop to around $0.316. Solana has also faced a 16% dip, falling below $200 to $184.

The total market capitalization of the cryptocurrency sector stands at $3.41 trillion, down from its all-time high of $3.9 trillion, according to CoinGecko. This broader market downturn suggests that investors may be taking profits ahead of the holiday season.

However, there is some hope for a recovery, as the period after Christmas—known as the “Santa Claus rally”—has historically brought positive momentum to the market. This rally, which typically occurs between December 27 and January 2, has resulted in market cap gains in 8 out of the past 10 years, ranging from 0.69% to 11.87%. Analysts are watching Bitcoin closely, as its price movements heavily influence the broader market. If Bitcoin can reclaim the $100,000 level, it could help reignite investor confidence and spark a potential post-Christmas rally.

Experts, including those from VanEck, have also speculated that Bitcoin may enter a new price discovery phase, with some predicting a price of $180,000 by Q1 2025. Despite the current downturn, Bitcoin’s MVRV-Z score suggests that it remains undervalued, potentially setting the stage for a recovery in the coming weeks.

At the time of writing, Bitcoin is trading at $95,870, down 1.1% in the past 24 hours.