Diwali cheer missing for crypto investors as Bitcoin crashed over 6%: What's next?
With Diwali just around the corner, the cryptocurrency market has taken a sharp hit. Bitcoin, the world's largest cryptocurrency, has fallen over 6% in the last 24 hours, slipping towards the $75,000 mark. The sell-off has also spread to other popular cryptocurrencies, with Ethereum, XRP and Solana witnessing steep losses.
At 11.50 pm, Bitcoin was trading at $75,458.76, down 6.21% over the past 24 hours. The decline comes amid growing concerns in global financial markets, particularly after a sharp fall in US technology and AI stocks.
The broader crypto market has also come under pressure, with its total market capitalisation falling 5.1% to $2.64 trillion.ETHEREUM, XRP AND OTHER CRYPTOCURRENCIES FALL SHARPLY
Bitcoin was not the only cryptocurrency to face selling pressure. Its closest rival, Ethereum, fell 8.3% to $2,221.39 during the same period.
Other popular cryptocurrencies also traded deep in the red. XRP declined 8.4%, while Solana lost 6.9%. Chainlink and Cardano were down 7.2% and 6.9%, respectively.
Meme coins, which are known for their sharp price swings, were not spared either. Dogecoin fell 6.9%, while Shiba Inu declined 3.9% over the last 24 hours.
The widespread losses suggest that investors are turning cautious and moving away from riskier assets.WHY IS BITCOIN FALLING?
The latest fall in Bitcoin comes against the backdrop of weakness in global technology stocks, particularly those linked to artificial intelligence and semiconductors.
Prateek Gupta, Head of Business at Mudrex, said Bitcoin had slipped to around $76,000, wiping out its post-election gains following a sharp decline on Thursday.
He pointed out that weakness in US technology and AI stocks had spilled over into the cryptocurrency market. The Nasdaq fell 4.7%, triggering a broader shift away from risky investments.
The sell-off was further intensified by large-scale liquidations. Nearly $1.08 billion worth of crypto positions were liquidated in 24 hours, with bullish traders bearing much of the impact.
Gupta also highlighted mixed signals from institutional investors. US spot Bitcoin ETFs saw inflows of $74.6 million on Wednesday, but BlackRock's IBIT fund extended its withdrawal streak to four consecutive days.
Markets are now looking towards the US jobs report for further cues.
Meanwhile, with Bitcoin struggling to regain its momentum, investors are keeping a close watch on key price levels.
According to Gupta, $80,000 is an important resistance level, while $75,000 is a key support level. If Bitcoin manages to hold above this level, it could help restore some confidence in the market.
The CoinSwitch Markets Desk said concerns around slowing AI growth, possible restrictions on data centre construction and high investor leverage have added to the pressure on global markets.
It noted that Bitcoin's inability to sustain a recovery above $80,500 points to limited buying interest at present.
The desk identified $73,000 and $68,000 as possible downside levels if the selling continues. Altcoins could face greater pressure during such a correction.
A sustained recovery above $80,000, however, would be needed to signal an improvement in market sentiment.WHAT SHOULD CRYPTO INVESTORS DO NOW?
The latest correction has once again highlighted how quickly cryptocurrency prices can move, especially when global markets turn volatile.
Avinash Shekhar, Co-Founder and CEO of Pi42, said the crypto market had witnessed a sharp correction, with Bitcoin falling below $76,000, Ethereum losing nearly 8% and XRP dropping to around $1.21.
He attributed the sell-off to weakness in US technology stocks, continued ETF outflows and liquidations worth more than $1 billion across the crypto market.
Shekhar also pointed out that Ethereum had faced additional pressure after seven consecutive days of ETF outflows, reflecting cautious sentiment among institutional investors.
According to him, the market's next move will depend on whether Bitcoin can hold its support levels and whether institutional money starts flowing back into the market.
For investors, he advised against making hurried decisions based on short-term price movements. Instead, they should follow disciplined investment strategies, manage their exposure and keep a close watch on global economic developments.
For active traders, managing leverage and tracking important price levels will be particularly important as volatility remains high.
With Diwali approaching, the sharp correction serves as a reminder that cryptocurrencies remain highly volatile assets. Investors looking to enter the market may want to assess their risk appetite carefully rather than rush in simply because prices have fallen.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
Jasmine Anand is a Senior Reporter (Emerging Tech) at India Today. With over 15 years of experience, she has earlier worked as a Financial Journalist in a multinational equity research firm, tracking equities, stock market, economy, IPOs and market-moving stories. Jasmine's forte is to scribe meticulously complex facts and figures into lucid and interesting reads. In her leisure time, she loves binging on movies and is passionate about painting, calligraphy, arts and crafts.
