What is the reason behind the current decline in cryptocurrency prices?
The cryptocurrency market is currently experiencing a period of consolidation during the week between Christmas and New Year’s Day, following a significant growth phase in the past month. CoinGecko data reveals that Bitcoin (BTC) and Ethereum (ETH) have historically shown sideways movements and less bearish momentum during the start of the holiday season in 2021 and 2022. In addition, the broader crypto market has also seen slight declines towards the end of December in the past two years. As of now, the global crypto market capitalization has declined from a local high of $1.764 trillion on December 25 to $1.728 trillion, marking a $36 billion decrease.
However, there are indications of potential bullish momentum in the crypto ecosystem. Market intelligence platform Santiment reports that there is a strong presence of “buy the dip” calls dominating the crypto social activity on major social media platforms, with X leading the charge, followed by 4chan and Reddit. Approximately 36% of crypto conversations on social media include the term “buy the dip.” Additionally, the terms “buy” and “bullish” have shares of 2.7% and 0.5% respectively. On the other hand, only 1.4% of social media mentions and posts involve the term “sell,” and a mere 0.1% refer to “bearish.”
These developments coincide with a 14% surge in global crypto trading volume over the past day, reaching $94 billion, according to CoinGecko.
