Key Points
- The altcoin market experienced a significant correction as Bitcoin’s price briefly fell to $94,355.
- Despite a major market crash, data suggests a surge in buying interest among cryptocurrency investors.
The altcoin market recently underwent a considerable correction as the price of Bitcoin momentarily dipped to $94,355.
In the past 24 hours, top altcoins have seen a correction of 3%-12%, with XRP and Cardano experiencing a 10.06% and 12.50% drop respectively.
Impact of the Market Crash
The total crypto market cap, excluding Bitcoin and Ethereum, decreased by 10.75%, erasing $121.69 billion in valuations.
This sharp decline has had a significant effect on altcoin holders, leading to drastic reductions in their portfolio values.
Data from Coinglass reveals that the crypto market lost $1.73 billion over the past 24 hours.
This broader market correction has hit optimistic traders with leveraged long-size positions particularly hard.
Market Reaction and Future Predictions
The data shows $1.55 billion in long liquidations compared to just $184.87 million in short-sized liquidations.
The largest single liquidation order occurred on Binance in the Ethereum-USDT pair, amounting to $19.69 million.
Furthermore, 580,793 liquidators were liquidated over the past 24 hours.
Amid the broader market pullback, Bitcoin registered a downfall of $185.03 million, with bulls losing $146.8 million.
Bitcoin’s open interest has dropped below the $60 billion mark and stands at $59.72 billion, with a 2.76% drop over the past 24 hours.
The open interest-weighted funding rate has declined to 0.0124% compared to the 0.0262% peak.
Social sentiments suggest the market views the correction as an optimistic entry opportunity.
Data from Santiment reflects a surge in buying interest among crypto investors based on social media volumes.
Over the past four correction dips, the social volume related to “buy” or “buying” or “bought” AND “crypto” or “cryptocurrencies” has seen a significant spike.
This indicates a broader market sentiment of buying additional crypto amid market pullbacks.
Over the past three dips, social media volumes related to purchasing more crypto have significantly increased.
Amid the current pullback, this surge in interest in buying additional crypto marked a fresh high, surpassing the previous three occurrences.
The crowd’s interest in trying to acquire more crypto for the fourth consecutive time reflects the surge in underlying confidence.
In resonance with the social volume surge, the Bitcoin price surged on similar days.
The first occurrence, documented on November 27, saw the Bitcoin price surge 4.41%.
This was repeated on December 4, marking a 2.97% jump, followed by December 6, which saw a 2.93% rise.
The Bitcoin price is likely to witness a recovery with the fourth occurrence.
Amid the ongoing correction, the Bitcoin price has broken under the 50-EMA line of the 4-hour chart.
Currently, Bitcoin is testing two crucial support confluences: the 100-EMA line of the 4-hour chart and a long-coming support trend line.
With multiple low-priced candles, the Bitcoin price is struggling to sustain its value above the $97,000 level.
This marks a crucial test of the previous bullish reversal point.
This increases the chances of a double-bottom reversal for Bitcoin.
However, the lack of bullish divergence and the declining trend in the MACD and signal lines also warn of a consolidation prior to any bullish recovery.
Based on the Bitcoin price action, the crucial resistance level is the previous peak at $101,171.
For a bullish recovery, the Bitcoin price must surpass the 50-EMA line and find a closing above this level to prolong the recovery run.
Hence, price action traders must pay attention to these crucial supply zones.
