The cryptocurrency market is incredibly hard to predict and there are moments that leave the community shocked and stunned. Most recently, market turbulence has left investors on edge, pondering whether this downturn marks the rock bottom or if a further decline lurks around the corner.
The recent selling frenzy, impacting major players such as Bitcoin, Ethereum, XRP, Solana, Cardano, DOGE, and SHIB, has ignited speculations regarding the future trajectory of the market.
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Global Market Fallout
Today witnessed a substantial selloff, triggered by investor concerns following the collapse of the crypto-exchange behemoth, Binance, coupled with factors like decisions from the Fed and other micro elements. In the throes of Asian trading, the global cryptocurrency market cap took a notable 5% nosedive, plummeting to $1.57 trillion.
This downturn was underscored by a significant 7% plunge in Bitcoin’s value, accompanied by noteworthy contractions in several leading altcoins. Reflecting this shift in sentiment, the Crypto Fear & Greed Index experienced a slight dip from 82 to 80, signaling a departure from the realms of ‘extreme greed.’
Macro Events Stir the Pot
The impending release of CME and PPI inflation data, coupled with the U.S. Federal Reserve’s year-end interest rate decision, compelled investors to shed their holdings, casting the market into the ‘red’ today. The potential delay of ETFs could further worsen the situation, casting a shadow over all crypto assets, with Bitcoin teetering around $42K, facing the looming threat of cascading down to the $39K level.
Read More: Crypto on High Alert: Delays for Bitcoin ETF? Expert Hints at January Roadblock
Is a correction brewing?
Well, that’s the reason behind the anticipation of a market correction had been brewing among analysts, especially considering Bitcoin’s rapid surge without substantial pullbacks. Renowned Bitcoin analyst Willy Woo emphasized the necessity of corrections to validate and solidify continued market rallies, particularly in periods of high market enthusiasm and during pivotal macro events.
Previous reports had hinted at an impending correction, suggesting the likelihood of Bitcoin’s price sliding further to fill the CME Bitcoin Gap situated at $39.7K before a potential upward swing. Recent market activity witnessed extensive liquidations, exceeding $400 million, accompanied by a significant number of trader liquidations within the past 24 hours.
Understanding the Market Dynamics
Presently, BTC hovers around $42,160 after exhausting earlier gains, with its 24-hour trading range spanning from $40,521 to $44,034. Simultaneously, ETH is trading at $2,243, reflecting a 5% drop in the last 24 hours, oscillating between $2,171 and $2,376. In the flash sell-off, other altcoins like XRP, Solana, and Cardano also faced significant drops ranging from 9% to 14%.
However, these prominent altcoins have already recouped about half of those losses, presenting an enticing opportunity for bargain hunters to enter the market. Overall, the total crypto market saw a 4.52% decline, totaling $73 billion down to $1,530 billion.
Also Read: Bitcoin Price Dips: Is This the Start of the Altcoin Season?
As the week progresses, investors keenly observe potential support levels for potential re-entry opportunities.
Are you a bargain hunter eyeing the dip? What altcoins are you interested in? Let us know!