Another Usual Bitcoin Crash: Bear to Run Short-Term, Bull to Follow It

[Cristiano]

The Cryptoverse insiders have tried to identify several causes for the latest bitcoin (BTC) fall that dragged the whole market down and it seems that history and arguments are once again repeating - many are bearish short-term and bullish long-term.
Today, BTC dropped below USD 40,000, and Crypto analytics firm Coin Metrics found it "inevitable" even before this happened. While BTC veterans appear to be "weathering the storm and continuing to hold for the long-term," given the major upgrades coming this year, the analysts at Coin Metrics gave two reasons for the current drop.

First is Elon Musk's changing positions on BTC and him moving back to dogecoin (DOGE), combined with Tesla removing BTC as a payment option, and their reason exasperating the Bitcoin energy consumption debate.

The second is the cyclical nature of crypto markets. "Despite the knee-jerk reaction to Musk’s Tweets, BTC’s recent downturn appears to be part of a larger trend. Crypto markets tend to be cyclical and move from periods of BTC domination to periods where smaller-cap assets reign supreme."

And currently, we seem to be in an altcoin cycle, a big part of which is ethereum (ETH)'s surge and it outperforming BTC. Also, what the cycle led is the rise of "Ethereum competitors", including ethereum classic (ETC), which resulted in BTC's dominance dropping, as well as trading volume for smaller-cap assets surging.

Commenters online reiterated what had been reported earlier - that people seem to be rotating out of BTC into ETH.

Also, one more reason for the drop is once again repeating crypto ban FUD from China.

"This is the latest chapter of China tightening the noose around crypto," Antoni Trenchev, Co-founder of crypto lender Nexo, told Bloomberg TV.

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