As Bitcoin Falls, Is Crypto Dead?

As Bitcoin Falls, Is Crypto Dead? Where Cryptocurrencies Might Go Next.

29 November 2023

Tuesday saw a decline in Bitcoin and other cryptocurrencies, prompting queries like “Is crypto dead?” Despite the fact that cryptocurrency has returned from its recent highs, traders are still optimistic about the most recent surge in digital assets due to both fundamental and technical factors.

With the largest digital asset dropping further from an 18-month high established last week over $38,000— the pinnacle of a surge that has propelled prices more than 30% higher since early October — Bitcoin has lost 1% of its value in the previous 24 hours, closing at $37,100. The majority of Bitcoin’s gains have been attributed to hope that U.S. authorities would soon authorize the first exchange-traded fund (ETF) for the cryptocurrency, which is anticipated to spark investor interest in cryptocurrencies once again.

“Even without the approval of one or more of these ETFs, Bitcoin could run past $45,000 fairly soon. Momentum is mounting, with investors seeing dips as a time for accumulation,” said Leo Mizuhara, CEO of digital asset management platform Hashnote.

Alongside ETF hopes, Bitcoin has also been buoyed by an improving macroeconomic backdrop, which has boosted the Dow Jones Industrial Average and S&P 500. Investors are increasingly confident that the Federal Reserve has finished raising interest rates and could cut borrowing costs early next year, a move that would most support risk-sensitive bets like tokens and tech stocks.

The technical picture is also solid, according to analysts, with Bitcoin holding firmly above several key levels — even as prices have paused for now, making the question “Is crypto dead?” appear.

Katie Stockton, managing partner at technical research firm Fairlead Strategies, said that a short-term consolidation phase holds Bitcoin. Bitcoin would resolve its consolidation phase higher with a move above around $38,000, which would act as a catalyst for a test of around $42,200. Our long-term indicators have shown improvement but are not yet decisively bullish. A breakout above around $42,200 would affirm a long-term bullish reversal.

Beyond Bitcoin, Ether — the second-largest crypto — fell 1.5% to $2,020. Smaller tokens or altcoins were also weak, with Cardano down 3% and Polygon 2% lower. Memecoins were firmly in the red, with Dogecoin dropping 3% and Shiba Inu shedding 4%.

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