As of the afternoon of November 4, the world’s largest cryptocurrency was trading around 103,900 USD, a decrease of nearly 4,000 USD compared to yesterday.
Bitcoin’s sharp drop causes the entire cryptocurrency market to plunge (Photo: CNBC).
Bitcoin’s decline also dragged down the entire cryptocurrency market. The total crypto market capitalization is currently around 3.46 trillion USD. Compared to the same period last month, the market capitalization still hovered around 4.3 trillion USD.
A series of other digital currencies also saw sharp corrections. Over the past 24 hours, Ethereum decreased by 6.4%, Solana by 11.1%, BNB by 8.15%, Hyperliquid by 9%, and so on.
According to Alternative‘s cryptocurrency market sentiment tracking tool, the Fear and Greed Index dropped to 21 points on November 4. The day before, the index was maintained at 42 points.
This is also the lowest index recorded by the tool in the past six months. This reflects that the sentiment among Bitcoin and cryptocurrency investors is more confused and fearful than ever.
Last week, the US Federal Reserve (Fed) continued to cut interest rates by 0.25%, bringing them down to 3.75-4%. This decision coincided with market forecasts and marked the second time the agency adjusted its monetary policy this year.
However, Fed Chairman Jerome Powell hinted that investors should not expect interest rate cuts in December. This negatively impacted risky markets such as cryptocurrencies.
In a recent statement, Vineet Budki, CEO of venture capital firm Sigma Capital, commented that Bitcoin’s price would continue to experience cyclical fluctuations. This implies that Bitcoin (BTC) could lose 70% of its value in the market’s next downturn.
The Fear and Greed Index has dropped to its lowest level in the past six months (Photo: CNN).
According to Budki, Bitcoin would not lose its utility even if its price dropped to 70,000 USD. However, the problem lies in people not understanding its utility.
“Over the next two years, Bitcoin’s price could fall by 65-70% because traders do not fully understand the asset they hold. When people buy assets they do not know and do not understand, they will sell them first. This creates selling pressure,” Budki shared.
In contrast, Arthur Hayes, a market analyst and co-founder of cryptocurrency exchange BitMEX, stated that Bitcoin’s four-year cycle has ended.
“Bitcoin’s price is influenced more by macroeconomic factors, such as interest rates and the growth of the money supply, and less by cyclical patterns,” Hayes commented.
