Bitcoin and Ethereum lose festive cheer but Cardano rallies

Bitcoin and Ethereum’s movement over the past week may have dampened festive spirits for holders of the coins

Bitcoin and Ethereum could not keep up its upbeat Christmas spirit, dropping 3% to below US$48,000 over the past 24 hours.

After reaching an all-time high of nearly US$68k in early November the largest digital tumbled to just over US$46k in mid-December, before enjoying an uplift above US$50k over the festive weekend.

After climbing to US$51,888 on 27 December, that seasonal good cheer has now largely evaporated.

There was no news behind the move, said analyst Jeffrey Halley at Oanda, who suspected year-end book squaring and the thin market conditions exaggerated the move, with “nothing to suggest that Bitcoin’s recent $45,000 to $52,000 is under threat”.

“Only a daily close above or below those levels’ hints that a new directional move is in play… only a weekly close below $40,000.00 will have me concerned that another major downside correction is in play.”

But the inability to stay above the US$50K mark “is worrisome for many crypto traders because this shows weakness in the current upward trend”, said analyst Naeem Aslam at AvaTrade.

“If the price continues to trade below this mark, we are likely to visit the early 40K price level again.”

Ethereum has also suffered since the start of the December, with the second largest coin down from US$4,750 trading to below US$3800, down 3% over 24 hours and almost 7% in a week.

XRP and Terra Luna coins have also had a tough festive period, down 10.55% and 9.02%, trading at US$0.85 and US$85.59.

On the upside, Cardano, the sixth largest coin by market cap, has remained immune from the Xmas crypto wobble, trading 8.87% higher than it was last week at US$1.41.

Another token that has performed well is Polkadot, where a 7.36% increase sees it trading at US$28, while the biggest movers were the Lady Uni and Metaworld coins, which surged 199% to $0.03477 and 155% to US$0.005709 respectively.

Looking back over 2021, Aslam said it has been “extremely important” year for the digital currency sector, but cautioned that investors should also keep in mind China’s moves to aggressively ban mining of cryptocurrencies within its borders, while India also considers adopting similar measures as mining of many digital coins consumes high levels of energy.

“Despite the recent slump in Bitcoin prices, the price of the notorious digital currency has surged by a whopping 70%. Furthermore, cryptocurrencies have not only achieved a higher market valuation, which is now estimated to be $2.5 trillion, nearly twice that of a year ago, but have also persuaded governments and institutional investors that blockchain technology has the potential to revolutionize traditional finance,” he said.

He said this led to “greater acceptance of digital currencies not just as a mode of investment” as well as a legal tender in El Salvador.