Key Points
- The cryptocurrency market experienced a 12.5% drop, with Bitcoin whales selling 6,813 BTC in a panic move.
- Despite the market drop and Bitcoin’s price decrease, some analysts see this as a normal part of a Bitcoin bull cycle.
In the initial days of the week, the entire cryptocurrency market saw a steep fall of around 12.5%, decreasing from $3.14 trillion to $2.75 trillion.
During this downturn, the price of Bitcoin fell from $96,000 to $84,000, a 13% drop.
Market Recovery
Currently, the total crypto market cap is experiencing a short-term intraday recovery of 2.72%, returning to $2.83 trillion.
Amid this recovery, Bitcoin has rebounded to $86,833, marking an intraday recovery of 3.29%. This short-term recovery has raised questions about whether the crypto market crash has bottomed out, or if a steeper correction is looming.
Analysts’ Views
Ki Young Ju, the founder and CEO of Cryptocoin, believes that the short-term pullback in the crypto market is perfectly normal.
According to his recent tweet, a 30% correction in a Bitcoin bull cycle is common based on historical bull performances.
In the 2021 bull market, before reaching a new all-time high, the Bitcoin price dropped nearly 53% in value. Hence, the historical data suggests extreme volatility but also paints an optimistic future.
According to the analyst, buying when prices rise and selling when they fall is the worst investment strategy. He also highlighted his previous tweet predicting a 30% potential dip from the all-time high.
Further Corrections Possible
Crypto analyst Ali Martinez has highlighted the potential reversal chances in Bitcoin.
Since 2022, buying opportunities have occurred when traders realized a loss margin of -12%. Currently, it stands at -8.25%, which indicates more room for a pullback before a bullish turnaround.
Whale Behavior Influences Market
According to a recent tweet by Santiment, more than 10 Bitcoin wallets have collectively dumped 6,813 BTC in the past week. This correlates with the recent price fall of nearly 20%.
Over the long term, the Bitcoin price is influenced by the behavior of whales and sharks, particularly wallets that contain more than 10 Bitcoin.
Due to this massive sell-off by key stakeholders, Bitcoin is likely to experience a steeper correction ahead. As per Santiment, this is the largest drop from whales and sharks collectively since last July.
Increased optimism in the crypto market for a bullish comeback by retail traders has generally led to a prolonged correction. This is based on a recent Santiment post, which highlights the social media mentions of buy vs. sell calls.
Bitcoin’s Future
As per the daily chart, the BTC price trend reveals a breakdown of a local support trendline. This has breached the S1 pivot support level at $91,265.
Currently, the lower price rejection in the previous intraday candle has driven a short-term recovery to $86,000 levels. The fresh green candle, after four consecutive bearish candles, forms a potential bullish-harami pattern.
However, if the BTC price closes under the $84,000 mark, the downtrend is expected to continue to the S2 support level at $80,000. On the bullish front, the immediate resistance for Bitcoin remains the $90,000 psychological resistance, followed by the S1 support-turned-resistance level at $91,265.
Therefore, based on recent posts by Santiment and a few analysts, the short-term recovery in Bitcoin comes as a short relief and could witness a steeper correction. Based on price analysis, this puts the short-term price target for Bitcoin at $80,000.
