Over the past 24 hours, the cryptocurrency market has experienced a shock, with major currencies such as Bitcoin and Ethereum falling by 10%. This phenomenon has attracted widespread attention from industry insiders and has also made many investors uneasy. Cryptocurrency price fluctuations are nothing new, but every major adjustment reminds us of the high-risk nature of this market and the challenges faced by investors in it. This article will delve into the reasons, impacts and possible future trends of this price drop.

First of all, it is crucial to understand the context of this price drop. The rapid development of the cryptocurrency market in recent years has attracted the attention of a large number of investors, especially driven by major currencies such as Bitcoin and Ethereum. According to CoinMarketCap data, Bitcoin's market value once exceeded one trillion US dollars, and Ethereum, as a pioneer of smart contracts, has also occupied an important position in fields such as decentralized finance (DeFi) and non-fungible tokens (NFT). However, the market's enthusiasm has not been able to resist its inherent volatility.

One of the direct causes of this price drop is the change in market sentiment. Investor sentiment is often affected by a variety of factors, including the macroeconomic environment, policy supervision, and market liquidity. Recently, the uncertainty of the global economy has intensified, especially the expectation of rising inflation and interest rates, which has made investors more cautious about risky assets. Bitcoin and Ethereum, as risky assets, are naturally also affected. In this case, many investors choose to stop losses, resulting in increased selling pressure and further driving down prices.

In addition, technical analysis also reveals the fragility of the market. After reaching a certain high point, the price of Bitcoin failed to effectively break through the key resistance level, but instead formed a technical pattern of head and shoulders. This pattern usually indicates that prices will fall, so when the market fluctuates, many traders choose to sell. This self-fulfilling expectation caused prices to fall sharply in a short period of time.

In this adjustment, Ethereum's performance is also not to be ignored. As a leader in smart contracts, Ethereum's ecosystem has experienced tremendous expansion in the past year, attracting a large number of developers and investors. However, with the adjustment of the market, many Ethereum-based projects are also facing the risk of a broken capital chain. This puts further pressure on the price of Ethereum, and many investors begin to doubt its future value.

In addition to market sentiment and technical factors, changes in policy supervision are also an important driving force behind this price drop. In the past period of time, governments have been increasing their supervision of cryptocurrencies, especially in major markets such as China and the United States. The Chinese government's crackdown on cryptocurrency trading and the adjustment of the US cryptocurrency tax policy have made investors uneasy. This uncertainty has increased market volatility, causing investors to choose to exit.

As the market fell, many investors began to re-examine their investment strategies. After this adjustment, investors' risk appetite has significantly decreased, and many people have chosen to shift their funds to more stable assets such as gold and bonds. This change not only affected the liquidity of the cryptocurrency market, but also made it more difficult for the market to rebound.

Of course, market volatility does not mean that the future of cryptocurrency is bleak. On the contrary, this adjustment provides investors with an opportunity to rethink and layout. After experiencing the previous frenzy, many investors began to realize that staying calm and rational is the key to dealing with market fluctuations. By analyzing the fundamentals and technical aspects of the market, investors can better grasp the timing of entry and profit from future rebounds.

Against this background, many cryptocurrency projects are also actively seeking innovation and breakthroughs. Ethereum's upgrade (Ethereum 2.0) plan has entered the implementation stage, aiming to improve the performance and security of the network. This process will not only attract more developers to participate, but also provide new impetus for the value enhancement of Ethereum. At the same time, the development of decentralized finance (DeFi) and non-fungible tokens (NFT) has also brought new investment opportunities to investors.

However, investors still need to be vigilant when participating in these emerging projects. The high volatility and uncertainty of the market require investors to have sufficient knowledge and experience to avoid losses caused by blindly following the trend. In this market full of opportunities and challenges, investors need to continue to learn and improve their risk management capabilities in order to succeed in future investments.

In summary, although major cryptocurrencies such as Bitcoin and Ethereum have experienced a sharp drop in price in the past 24 hours, this does not mean the end of the market. On the contrary, this adjustment provides investors with an opportunity to reflect and re-position. As the market continues to develop and mature, the future of cryptocurrencies is still worth looking forward to. Investors need to remain calm and make prudent decisions when facing market fluctuations in order to seize opportunities in future rebounds.

In this rapidly changing cryptocurrency market, the ability to obtain and analyze information in a timely manner is particularly important. With the increase in market participants, the transparency and liquidity of information are also increasing. Investors should not only pay attention to price fluctuations, but also pay attention to the market dynamics and policy changes behind them in order to find their footing in the complex market.

Ultimately, investing in cryptocurrencies is not just about pursuing short-term profits, but also about believing in the future development of financial technology. In this era of change, only investors who are brave enough to explore and keep learning can remain invincible in this volatile market. Facing the future, no matter how the market changes, keeping an eye on innovation and being vigilant against risks is the attitude that every investor should have.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

The price of Bitcoin has fallen by more than 10% in the past 24 hours as the cryptocurrency market suffers another major correction in December.

BTC, BCH, ETH, LTC, DASH, IOTA and other virtual currencies fall

Except for Ripple, major cryptocurrencies including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Cardano, IOTA, NEM and Monero have all shown a significant decline in value.

Since December 27, the market valuation of cryptocurrencies has plummeted from $621 billion to $567 billion, and nearly $54 billion overnight.

Although there is no major event or catalyst that has led to the recent decline in most cryptocurrencies, analysts believe that it is caused by the sudden increase in the value of cryptocurrencies in the past few months.

Some cryptocurrencies like Cardano have gained more than $10 billion in value within a few months of their launch. The sudden surge in the value of cryptocurrencies in the market has caused investors and the market to reconsider the current valuation of the cryptocurrency market.

It is also important to acknowledge that in early October alone, the total market cap of all cryptocurrencies on the market was less than $145 billion. Today, the market cap of Bitcoin alone is already twice the market cap of the entire cryptocurrency market in October.

Cryptocurrencies are also in the early stages of development and adoption. Inevitably, digital currencies like Bitcoin remain highly volatile assets years from now, with high volatility in cryptocurrencies, and the market needs to mature, develop, and evolve. Until then, gains and losses of 10% in a single day may occur regularly.

Earlier this month, Blocktower CIO and co-founder Ari
Paul confirmed to CNBC that Blocktower placed a $1 million bet with LedgerX, a Bitcoin derivatives exchange regulated by the U.S. Commodity and Futures Trading Commission (CFTC), that the price of Bitcoin will reach $50,000 by the end of 2018.

In the interview, Paul pointed out that given Bitcoin's high volatility, investors should expect the price of Bitcoin to drop significantly, and in the same way, investors would expect the price of Bitcoin to surge after a major correction.

Paul said, "If Bitcoin is below $50,000 next year, then it will fail. However, if Bitcoin reaches $100,000, it will get a 1-30 times return. Bitcoin is volatile, it is a very volatile asset. Bitcoin has risen by more than 1,400% this year. It has fallen by 30% almost every other month. This information is a bet that if its volatility rises, we can easily see it exceed $50,000 next year."

Where does Bitcoin come from? 

At the time of reporting, even on futures exchanges such as the Chicago Board Options Exchange (Cboe) and the Chicago Mercantile Exchange (CME), Bitcoin has shown a high premium for several weeks, with Bitcoin trading below $14,000. That is, more than $600 lower than the global average price of $14,600.

Based on the trend of the cryptocurrency market, analysts expect the price of Bitcoin to decline as other cryptocurrencies in the market recover, as weak hands are declining and long-term holders remain.