On Friday, the market prices of the largest digital asset bitcoin and other cryptocurrencies dropped by 10% which looks like a short-term correction after a red-hot rally. Trader signal shows that the crypto price may fall further even as traders remain bullish on the outlook.
As a result of the price of Bitcoin dropped over the past 24 hours to $67,100, with the largest crypto falling below $66,900. Huge volume of bitcoin long positions have been wiped out.
The cryptocurrency market has experienced a significant shift in pricing dynamics. Approximately $680 million in assets has been liquidated following a reversal in the price trend of Bitcoin over the past 24-hour period.
Bitcoin hit an all-time high near $74,000 earlier this week, after blowing through the November 2021 high of around $69,000 in the week prior, amid a rally that has seen the market capitalization of digital assets rise to $2.6 trillion.
“Bitcoin looks very bullish even if it witnesses a much-delayed correction in the coming days,” said Rachel Lin, CEO of trading platform SynFutures. “With Bitcoin clearly in price discovery mode, we might see a strong uptrend in the coming weeks and months.”
Indeed, Bitcoin is still up by some two thirds this year and continues to be supported by several catalysts.
Among them is jubilation in the stock market and a wider improvement in risk sentiment, with the S&P 500 and Nasdaq remaining near record levels and buoying cryptos, which have long shown themselves to be correlated with equities.
Traders are also bullish about Bitcoin’s so-called halving — a cut to the token’s programmed monetary policy that will see supply restricted next month, potentially boosting prices at a time when demand has been rising.
“New historical highs are a trigger for selling. Some players are taking profits, which raises the question of whether there will be enough hot buyers at current levels or whether the majority will prefer to wait for a deeper correction,” said Alex Kuptsikevich, an analyst at broker FxPro.
“In a corrective scenario, the $65,000 to $65,500 and $60,000 to $60,500 areas are of particular interest, as they contain important round levels significant for retail [investors],” he added.
