The prices of top cryptocurrencies including Bitcoin, Ethereum, Solana, and dogecoin have dropped by 1 to 4 percent in the last 24 hours and the overall crypto market has also plunged in value over the last day.

Bitcoin has fallen 14% this year after falling below $40,000 for the first time since September last year a record low start to the year since 2012. Is this good or bad news to crypto investors? Either way, you want to look at it there is no right or wrong answer. See, in crypto, a fall in price is disguised in a silver lining it depends on one’s investment strategy.

For the long-term traders, it is a chance to accumulate by buying and holding the dip, for the short-term traders this may be a major test for the investment option as the digital asset may seem unstable. Nonetheless, just like any other marketplace, the prices are not constant for example they fluctuate based on various factors. A plunge is generally triggered by some factors like;

Speculation- This is driven by investors betting on the price

Whales — The investors holding a big amount on bitcoin and decide to sell them leading to a crash in prices.

Short-term traders- This is generally marked by investor pessimism which can cause prices to continue falling, adding to further negative sentiment.

On the contrary, when the coin prices pump the driving force is mainly influenced by;

Scarcity- according to there are 21 million the limited number of the total mined coins in circulation which around 21 million. This refers to the finite mechanism of cryptocurrencies. The total number of Bitcoins that can be mined is pre-determined in the protocol at 21 million. So, when more people join the industry, there is bound to be scarcity for Bitcoin and its price may skyrocket. Some coins also use the burning mechanism, which is destroying a part of the coins in supply, to raise their value.

Utility ability- Currently, so many businesses are adopting the payment by crypto which contributes to the value going up. If more people spend them for buying goods and services instead of merely holding them, the price will keep rising. With restaurant chains, online stores gradually warming up to the idea, the coins are likely to grow.

Market correction- This is a market correction is often a temporary price reversal before the market continues moving upwards.

Cryptocurrencies are likely to remain under pressure as at the moment as based on the current market behavior BTC may fall to £20.

ETH has been outshone by altcoin rivals after a slow and unpromising start to 2022 while other altcoins were showing off double-digit growth. Today (17 January) the price of an ETH is $3,273 down more than 12% since New Year and despite an effort last week to shake off the doldrums failed to break a resistance level at $3,400. (https://capital.com/ethereum-eth-price-prediction)

The total crypto market volume over the last 24 hours is $70.11B, which makes an 11.55% increase. The total volume in DeFi is currently $10.92B, 15.57% of the total crypto market 24-hour volume. The volume of all stable coins is now $54.07B, which is 77.12% of the total crypto market's 24-hour volume. The global crypto market cap is $2.05T, a 0.93% decrease over the last day.

Within the crypto world, this so-called “dominance” ratio is one of the oldest and most investigated metrics available. It measures the coin’s market cap relative to the overall crypto market — for instance, it shows how strong Bitcoin is compared to all the other cryptocurrencies that are not BTC, called “altcoins”. In the case of Ethereum, the dominance somewhat reveals how often it is used for smart contracts and whether it is a popular blockchain for Decentralized Finance (DeFi) applications.

Bitcoin’s price is currently $42,747.60. It takes the largest market cap since it was the first asset in the crypto ecosystems, it continues to dominate the market at 39.8% an increase of 0.22% over the day according to https://coinmarketcap.com/$42,747.60. It takes the largest market cap since it was the first asset in the crypto ecosystems, it continues to dominate the market at 39.8% an increase of 0.22% over the day according to https://coinmarketcap.com/

The dominance of Ethereum (ETH) increased over the course of 2021 — after an initial decline — but was not as high as it was back in 2017. Within the crypto world, this so-called “dominance” ratio is one of the oldest and most investigated metrics available. It measures the coin’s market cap relative to the overall crypto market, it shows how strong Bitcoin is compared to all the other cryptocurrencies or the altcoins. In the case of Ethereum, the dominance to some extent reveals how often it is used for smart contracts and whether it is a popular blockchain for Decentralized Finance (DeFi) applications. ETH is currently trending at a distant number two after BTC, Dominating the market at: 18. 5%. https://coinmarketcap.com/

The current drop in the BTC prices has a ripple effect on the chart’s patterns too. The curve is linear and is revolving around greens which basically indicates it is good to hodl and safe to buy the dip.

All information is based on personal views and does not constitute to a piece of actual financial advice. It helps to have a solid investing strategy in place to avoid panic selling and buying.