The Bitcoin (BTC) rate on the morning of December 26 fell below $43 thousand, reaching $42,628 on the Binance exchange in pairs with the stablecoin Tether USD (USDT). The last time BTC traded below $43k was last Tuesday, December 19th. At 16:20 Hong Kong time, the first cryptocurrency costs $42,800. The BTC rate began to decline at approximately 8:00 Moscow time. A sharp drop in the price of BTC provoked a massive forced closure of margin positions of traders on crypto exchanges. Thus, according to Coinglass, over the past four hours, long positions totaling about $50 million were liquidated.
Other coins from the top 10 by capitalization generally follow the market leader. The second largest cryptocurrency Ethereum (ETH) is trading at $2,234, having fallen in price by 2% over the past day. Prices of Avalanche (AVAX) and Polkadot (DOT) tokens have decreased by 3% over the past 24 hours, while the latter has risen in price by 30% over the week. The leader in weekly growth remains Solana (SOL) – the token is trading at $113 and has increased in price by about 50% over the week.
Meanwhile, Bloomberg analysts analyzed the dynamics of digital assets and noted that “the sense of doom that gripped cryptocurrency markets at the end of 2022 after the loss of $1.5 trillion gave way 12 months later to a completely different feeling – greed.” In 2023, Bitcoin grew by more than 160% – from $16.5 thousand to $44 thousand. The recovery of the first cryptocurrency, and after it a large part of the digital asset market, is a bet by industry participants on spot Bitcoin ETFs, the approval of which is predicted in soon.
Bitcoin’s rise has boosted the market capitalization of the leading digital asset by approximately $530 billion. Investors have returned to risk-taking, and many other cryptocurrencies have soared in price. Thus, an investor who bought Solana (SOL) for $100 thousand at the beginning of 2023 would now receive a profit of more than $800 thousand, Bloomberg calculated. The report also analyzed market movements and compiled facts showing how cryptocurrencies performed in 2023. First of all, the authors note that in 2023, Bitcoin outpaced the global stock market and gold in terms of growth dynamics. The publication compares its own indices by asset class. At the same time, the first cryptocurrency continues to trade below its historical maximum of $69 thousand, recorded in November 2021. In early December, BTC rose to $44.2 thousand, setting a local maximum at this level since April 2022.
Demand for Bitcoin options reached unprecedented levels in 2023. Open interest in Bitcoin options on Deribit, the largest derivatives exchange, topped $16 billion for the first time in December. At CME Group, open interest in Bitcoin futures also reached record levels. However, the decentralized finance sector is still reeling from the collapse of the Terra project in 2022, with the exception of liquid staking services. The total value of blocked assets in such projects has risen to record levels. This was facilitated by the fact that liquid staking protocols offer a simplified way to earn such money, as opposed to self-staking. The popularity of the service on Ethereum, in particular, began to grow after the network of the leading altcoin was updated in April of this year.
Weekly NFT trading volumes have risen from year-end lows, from $50 million in October to about $180 million in December, the article’s authors write, citing Nansen data. But that’s just a fraction of the 2022 peak of $1.8 billion, suggesting the sector as a whole has a long way to go to regain previous levels of interest. Additionally, the market distribution among cryptocurrency exchanges has changed markedly during 2023. At the beginning of the year, Binance accounted for more than 65% of spot volumes, and by the end of the year, amid litigation on the US crypto exchange, its share fell below 44%. Binance is still the largest platform. But some of its business was taken away by Asia-focused platforms such as Upbit, Bybit and OKX.
The predominance of the feeling of “greed” in the crypto market at the end of 2023 is also shown by the “Fear and Greed” index. In December, the indicator fluctuates between 65 and 74 points—on the border with “extreme greed,” which starts at 75 points. At the end of 2022 and the beginning of the current year, the indicator was around 25–30 points. The activity of miners is also breaking records. The difficulty of Bitcoin mining on December 23 updated its historical maximum, reaching 72.01 T. The average hashrate in the Bitcoin network increased to 515.36 EH/s, which is also the maximum value.
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