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Tuesday, December 5, 2023

The market that never sleeps: Bitcoin corrects

On the second day of the week after Christmas, the crypto market is initially corrective mood. Compared to many a Christmas crash, Bitcoin and Co. get off lightly this year.

If traditional markets and the crypto market differ in one aspect, it is in this one: While the stock market is tied to strict trading hours (on the Deutsche Börse Xetra, for example, trading is allowed from 9 a.m. to 5:30 p.m. every weekday), cryptocurrencies are traded around the clock – even during public holidays. The order books of the Bitcoin exchanges around the world match positions at any time of the day or night without having to adhere to common structures such as working hours. The pricing mechanism in the crypto market can thus be described as much more efficient than that of classic markets.

This fact becomes all the more evident on public holidays. Because while stock exchanges fall into collective hibernation at Christmas time, trading on the crypto market continues. So it is not surprising that some price developments can be reported in Kryptoland even in the contemplative time. Unfortunately not a positive one from the cops’ point of view.

The key currency Bitcoin (BTC) corrected by 3 percent within 24 hours on the second day of the week after the holidays and is trading at 49,234 US dollars at the time of writing. With this, the crypto currency No. 1 gets off lightly. The smart contract coin Solana (SOL) even has to accept a price minus of 4.8 percent and Terra (LUNA) is the whipping boy of the day with minus 8.3 percent. BTC-ECHO editor Moritz Draht dedicated a detailed story to the latter coin in the December edition of the Kryptokompass . There he gets to the bottom of the mechanics of the network, which among other things protects the stablecoin TerraUSD (UST).

Bad memories of 2017

The losses may be painful for the individual investor. Compared to the sometimes chaotic price movements during the Christmas season of previous years, these were calm holidays. Some may remember: Christmas 2017, for example, marked the climax of the most recent crypto hype: In December 2017, the largest bubble in the sector to date burst and Bitcoin rushed from the high of just under 20,000 US dollars to a third of its value within a few weeks. That would be like Bitcoin standing at $ 15,000 in February 2022.

But there can be no talk of such horror scenarios these days. The most recent correction may well be pushed into the realm of healthy course corrections; after all, Bitcoin is also 4.7 percent up on seven days.

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