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flag ★ Crypto fever: bitcoin tumbles, altcoins gains up to 70%

Analysis News:::2021-10-28T12:16:01

Crypto fever: bitcoin tumbles, altcoins gains up to 70%

On Wednesday, the digital assets sector closed the trading session with a sharp drop in the value of the leading virtual coins Bitcoin and Ethereum. Thus, BTC dropped to $60,000, and ether fell to $4,000.

 Crypto fever: bitcoin tumbles, altcoins gains up to 70%

Experts believe that the reason for such huge losses lies in the active use of borrowed funds by traders. This means that in the near future, some of the top 10 cryptocurrencies in terms of market capitalization may lose about 15% of their value daily.

Amid such high volatility of virtual currencies, market experts warn of high risks in case traders dedicate most of their investment portfolio to digital coins. At the same time, they argue that making money on cryptocurrencies is quite simple, but losing an impressive amount of equity capital is even easier. This advice is especially relevant to investors who are targeting short-term cryptocurrency trading strategies and avoid the buy-and-hold option.

However, those who prefer long-term trading, may not worry about the recent drop in the first cryptocurrency. When in doubt, market analysts recommend focusing on the events of 2017, when bitcoin collapsed by 80% in some trading sessions.

The altcoin market shows even more unpredictable results this week. Thus, on Wednesday, the price of the Shiba Inu cryptocurrency jumped to 70%. Against this background, its main competitor, the Dogecoin token, lost its honorable ninth place in the ranking of the ten leading cryptocurrencies.

At the same time, DOGE did not want to give up. In the early trading session on Thursday, it soared by 40%. In just a couple of hours, the cryptocurrency won back its ninth place in the ranking and came close to its two-month high. The Dogecoin trading volume increased by 300% per day, and its market capitalization turned out to be above $40 billion.

Although the SHIB coin continues to gain in value following a significant correction, its market capitalization is still below $30 billion.

According to the results of the last week, the price of Shiba Inu soared by 130% (by 645% per month), while DOGE added only 20%. Supporters of the Shiba Inu cryptocurrency continue to believe that Robinhood, a well-known trading platform, will soon include the coin in the list of virtual assets available to customers. If this happens, the popularity and trading volume of this altcoin will considerably increase, thus providing the cryptocurrency with a strong driver for further growth.

Market experts attribute such a spectacular rally of the DOGE and SHIB meme coins to the fact that after Shiba Inu's upward movement, traders decided to move funds to the weaker Dogecoin, which is currently trading 55% below the May high.

By the way, another popular joke cryptocurrency, the Floki Inu altcoin, named after Tesla CEO Elon Musk's pet dog, has surged by more than 120% over the past 24 hours.

Cryptocurrency market experts warn that meme coins are a rather speculative asset, and their price is highly volatile and directly depends on rumors, gossip, and tweets of famous people rather than on complex market processes.

Analyst InstaForex
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