Crypto Market Takes Another Hit: Bitcoin and Ethereum Plunge

The crypto market faced another rough day as Bitcoin and Ethereum saw significant drops. Bitcoin fell below $86, 000 before slightly recovering, while Ethereum dropped over 7%. Other cryptocurrencies like Solana and Dogecoin also took a hit, continuing the downward trend from November. This latest slump comes after a period of instability in the crypto world. Earlier in October, a massive sell-off wiped out $19 billion in leveraged bets, just days after Bitcoin hit a record high above $126, 000. November wasn't any better, with Bitcoin losing nearly 17% of its value, marking its second-worst month of the year. Experts are worried about the lack of support from institutional investors and the absence of buyers during these dips. The market's volatility is a concern, especially with the year coming to a close. The situation is made worse by the high leverage in the market, which can lead to sudden and severe price swings. Beyond crypto, global markets are also feeling the pressure. Asian equities faced a shaky start after a recent rally, and the yen surged following hints of a potential rate hike by the Bank of Japan. This could impact the lucrative yen carry trade and affect risk assets, including crypto. The structure of the crypto market itself is a cause for concern. It's heavily driven by retail investors, who react differently than institutional investors. The decentralized and often opaque nature of many exchanges makes it hard to track risks, adding to the market's instability.