For the first time in a week, Bitcoin fell below $42,000, and the recent memecoin surge appears to be coming to an end.
On Tuesday in New York, the largest cryptocurrency by market value fell as much as 4.3% to $41,656. More tokens tumbled, falling more than 10% apiece, including smaller, less well-known ones like Solana and Avalanche, which had gained in recent weeks.
Jaime Baeza, CEO of cryptocurrency hedge fund AnB Investments, stated, “Moving forward, I recommend exercising caution and preparing for possible fluctuations this week due to year-end flows, expirations of options and futures, and the generally low liquidity caused by the holiday period.”
“The primary focus at this time is the December 29 expiration of Bitcoin options,” stated Greg Moritz, co-founder of the cryptocurrency hedge fund AltTab Capital. “Normally, we anticipate tremendous volatility on that day when we see such a high volume of options expiring.”
Because of the expectation that the US Securities and Exchange Commission would soon approve the first exchange-traded fund that invests directly in bitcoin, the price of the cryptocurrency has increased by more than 150% this year. Investors will discover by January 10th whether the bet, highly favored by cryptocurrency enthusiasts, proves successful.
However, recently, novel nonfungible tokens and memecoins like Dogwifhat have yielded the largest profits. Many of these tokens, which are currently selling for pennies on the dollar, have increased in value by over 1,000% in a couple of days. Now that Bonk has dropped around 15% and Dogwifhat has dropped almost 30%, the euphoria is abating.