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The return of the price of Bitcoin to the $16,000 channel and the fall of altcoins; what is the reason?

سقوط بازار - قیمت بیت کوین اتریوم bnb

Last week, after the announcement of the US Consumer Price Index, we saw a significant increase in prices in the cryptocurrency market. But after the Federal Open Market Committee meeting, talk of continued interest rate hikes reignited fear in financial markets and prices began to fall. The price of Bitcoin has reached $16,723 with a drop of 4.34%. Ethereum is also not doing well, trading down more than 7% at $1,181. The interesting thing to note is the very sharp drop in the price of altcoins in the past day.

According to Mihan Blockchain and quoted by Cointelegraph, after Jerome Powell, the head of the US Federal Reserve, announced the US Consumer Price Index (CPI) at 7.1% in November last week, the markets reacted. They showed positive and we saw the significant growth of Bitcoin and Ethereum and most of the altcoins. Perhaps few people expected this speed in recapturing the recent growth, and after increasing hopes, we are once again witnessing the penetration of fear and uncertainty in the market.

What was the reason for the decrease in the price of Bitcoin?

A day after the CPI index, it was the interest rate’s turn to show off its influence on the market. The Federal Reserve raised interest rates by 0.5%, which was within the range expected by most market participants. But the issue that poured clean water on the hands of the market traders was that the Federal Open Market Committee announced Interest rates should reach a range of 5% to 5.5% in order to achieve the goal of bringing inflation to 2%.

This was the opposite of what traders expected; Traders expected to see a turnaround in the Federal Reserve’s policies in the first half of 2023 (December 1401 to July 1402). Anyway, this issue had its impact on all the financial markets, including the cryptocurrency and stock market, and that feeling of optimism and changing the trend slowly gave way to fear.

On the other hand, the Bank of England increased the interest rate by 50 basis points (BPS) on September 15 and brought the bank interest rate to 3.5%. This was the ninth consecutive interest rate increase by the Bank of England (BOE).

In addition, UK inflation expectations beat market estimates, as inflation fell from 11.1% to 10.7%, and the core inflation rate (prices of goods and services minus food and energy) fell from 6. 5% to 6.3%.

In addition, the European Central Bank raised interest rates from 1.5% to 2% and announced a plan to reduce its balance sheet.

In the image below, which was prepared from the price page of cryptocurrencies in the country of blockchain, the price changes of the top 10 cryptocurrencies in the market (in terms of market value) can be seen.

Currently, if we visit the service “Comparison of buying and selling prices of digital currencies in exchanges” of the country of Blockchain, we will see that the selling price of USDT in Iranian exchanges is in the range of 39,600 to 39,900 Tomans. This issue has caused the price of bitcoin to reach around 667 million tomans in the exchanges despite this drop.

Platform Data Coinglass It shows that in the last 24 hours, about 235 million dollars of trading positions have been liquidated in the exchanges. 91% of this amount was related to long positions. The interesting thing to note is that the amount of liquidity related to Ethereum has exceeded that of Bitcoin.

What is the status of Bitcoin and Ethereum?

The figure below shows the price chart of Bitcoin and Ethereum in the 4-hour time frame. As it is known, the price of Bitcoin was advancing with the slope of the orange upward trend line and even increased to the limit of $18,400. The RSI indicator broke its uptrend line (red circle) a little earlier than it broke the trend line last day and issued the first signal for the market to fall.

The opposite happened with Ethereum.

Bitcoin price chart 4-hour time frame Source: Trading View
Bitcoin price chart 4-hour time frame Source: Trading View
Ethereum price chart 4-hour time frame Source: TradingView
Ethereum price chart 4-hour time frame Source: TradingView

What is the status of Binance Coin (BNB)?

Binance exchange faced various problems last week. In the previous report of Blockchain Homeland, we saw that the Reuters news agency announced that the US Department of Justice is seeking legal action against Binance on charges of money laundering. Although Binance called this news false; But it seems that it had an impact on the users of the exchange and caused withdrawals from the Binance exchange to intensify. The events of the last week were not very pleasant for the price of Binance Coin.

After yesterday morning, Mazars, the French audit company that audited the Binance exchange, announced that it has suspended its cooperation with Binance and other digital currency exchanges due to “concerns about how its audit report will be perceived”. This news landed another hammer on the Binance token and intensified the downward trend of this coin. So, in the last 24 hours, the price of bnb has fallen by more than 12%, and in total, bnb has shown a 20% price reduction in the last seven days.

The rise of Bitcoin dominance and the sharp fall of altcoins

The severe fall of altcoins in the past day, in addition to the decrease in the price of Bitcoin, also happened due to the upward trend of Bitcoin dominance. As far as the price of many alts since Bitcoin was around $16,000; has also come down. In the figure below, the Dominance chart of Bitcoin can be seen without considering stablecoins in the daily time frame.

Bitcoin Dominance chart excluding stablecoins Source: TradingView
Bitcoin Dominance daily chart excluding stablecoins Source: TradingView

For example, on November 29, when the price of Bitcoin was around $16,100 and the market cap of BTC was $316 billion; The total market value of cryptocurrencies was 835 billion dollars. Currently, the market cap is equal to 805 billion dollars, of which 321 billion dollars is related to Bitcoin. With a simple calculation, we realize that during this period, despite the increase in the price of Bitcoin, about 35 billion dollars of capital has been withdrawn from the altcoins market.

You can use the following article to check the fundamental status of the projects.

In the following, we discuss the status of some altcoins in the last 24 hours.

The best and worst performing altcoins

Among the top 100 crypto market projects by market capitalization, the best performer over the past 24 hours has been Bitfinex’s native token LEO, which rose 7% to $4. Also, TONcoin has increased by 3% to around $2.44.

The worst performance is related to FIL, the utility token of the FileCoin project, which has reached the $3 mark with a 26% decrease. In addition, the TWT price of the native token of the TrustVault wallet has also decreased by 24% to $1.6. Chiles Token (CHZ) has also reached $0.11, continuing its downward trend. The price of this token has fallen by 58% in the last 28 days.

Among the top 10 projects in the market, the following performance was recorded in the past day:

  • Bitcoin (BTC): $16,740 with 4% decrease
  • Ethereum (ETH): $1,183 with 7% decrease
  • Binance Coin (BNB): $235 with 11% decrease
  • Ripple (XRP): $0.35 with 6% decrease
  • DOGE: $0.078 with 10% off
  • Cardano (ADA): $0.264 with 12% decrease

You can refer to the following link to check the market and bitcoin situation.

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