Cryptocurrencies fell this week, with Bitcoin briefly dropping below $60,000 and Ethereum reaching its lowest level this month, in a retreat from recent record highs.
BTC price has declined by 4% since last Monday, wiping out a 3.5% gain it had over the past week. Since the beginning of this month, the BTC price has fallen by 1.5%. At the time of writing, BTC traded at $59,662.52, down by 2.09% in the past 24 hours.
Monday, Nov 15, saw the flagship cryptocurrency fall by 2.92%, continuing losses into Tuesday when it fell by a substantial 5.4% to end the day at $60,124, its lowest daily close since October 14, when it ended at $57,354.
Nevertheless, BTC's value has appreciated by about 100% so far this year despite the recent pullback, reflecting the long-term bullish outlook.
Meanwhile, Ether, the world's second biggest cryptocurrency, fell to a 20-day low of $4,070.81 on Wednesday and was last trading at $4,157.53, down by around 2.8% on the day. It lost about 10% since last Monday.
Crypto Developments That Weigh On Market Sentiment
While the driving factors behind the price movement were unclear, there were several news reports recently that possibly dragged cryptocurrency down.
The first wave of selling started on Monday when The Wall Street Journal quoted Twitter's CFO Ned Segal as saying that investing cash into crypto assets like Bitcoin is not a good idea at the moment. As critical factors preventing the company from diversifying into cryptocurrencies, Segal cited price volatility and a lack of accounting standards.
Although no one expected Twitter to announce crypto investments, Segal's comments may have triggered a risk-off mood sentiment amid the dollar's rise and the controversial crypto tax requirement included in the $1 trillion infrastructure bill signed by the US President Joe Biden on Monday, which is set to take effect in 2024.
Many crypto advocates have criticized the bill as it implements tighter rules for businesses dealing with cryptocurrencies and expands reporting requirements for brokers. Going forward, the bill requires digital asset transactions worth over $10,000 to be reported to the Internal Revenue Service (IRS). This will make it difficult for corporations to adopt digital assets.
More so, the crypto industry is concerned that the scope of the word "broker" may be too broad. Node operators and miners could be hit by taxes and face tax reporting challenges.
There was an attempt by some senators to clarify the crypto tax reporting requirements through an amendment to the bill, but it did not receive approval. A majority of senators who supported the amendment eventually voted for the bill, but Pat Toomey criticized the legislation as “too expensive, too expansive, too unpaid for and too threatening to the innovative cryptocurrency economy”. In regards to the crypto tax reporting requirement, he said it was probably not going to work.
In the meantime, as the next step in cracking down on crypto mining, China's National Development and Reform Commission (NDRC) announced On Tuesday that it would consider "punitive electricity prices" for miners, adding to the gloomy mood in the market.
At the same time, the dollar index, which measures the value of the greenback against major fiat currencies, hit a fresh 16-month high on Tuesday amid fears the Federal Reserve might raise rates sooner than expected. A rate hike generally has a bullish effect on domestic currencies and weighs down inflation hedges like bitcoin and gold. The crypto market has likely fallen because of this factor as well.
Despite all this happening, the majority of analysts, and me too, believe that we’re seeing a correction currently which is inside of a larger uptrend that recently brought us to new all-time highs. So panic-selling is not a good idea.
According to TechDev crypto analyst, technical indicators confirm a correction, with PA continuing to stay 5-8 days behind 2017.
Top Weekly Gainers
Among the top gainers rising the most over the past seven days were:
Angry Squid, a coin inspired by the squid game, was the best weekly performer, rising by a jaw-dropping 10,352,463.35% over the past seven days. At the time of writing it traded at $0.0003139.
HUSKYX continues its impressive rally, posting a whopping 1,522,748.25% gain over the past seven days, making it the second top gainer, at the time of writing trading at $0.000007092.
Meanwhile, ARC Governance last traded at $756.55, with its 7-day gain coming in at 200,379.53% and bringing it to a position of the third top weekly gainer.
GenshinShibInu (GSHIB) was the fourth best-performing coin, posting a 4,287.16% increase in the last seven days. At the time of writing this article, GSHIB traded at $0.00000004927.
GreenMoonZilla was the fifth top gainer, marking a 3,166.34% gain over the past 7 days and last trading at $0.1562 and continuing the impressive last week’s rally together with HUSKYX.
This article has been first published with FXStreet.
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