The cryptocurrency market’s recent tumble has left investors worried, questioning if it has hit rock bottom or if another downturn looms. This selling spree, hitting major coins like Bitcoin, Ethereum, XRP, Solana, Cardano, DOGE, and SHIB, has prompted speculation about the market’s future direction.
Today, the crypto market witnessed a massive selloff as investors identified risks after the collapse of the crypto-exchange Binance, Fed, and other micro factors. During trading in the Asian region, the global cryptocurrency market cap experienced a notable 5% drop, reaching $1.57 trillion.
This decline was underscored by a substantial 7% fall in Bitcoin’s price, accompanied by noteworthy decreases in various leading altcoins. This shift in market sentiment was reflected in the Crypto Fear & Greed Index, which decreased slightly from 82 to 80, signaling a move away from ‘extreme greed.’
Economic Data and Federal Decisions: Catalysts for Market Movement
The impending release of CME and PPI inflation data, along with the U.S. Federal Reserve’s year-end interest rate decision, spurred investors to offload their holdings, plunging the market into the ‘red’ today. So if ETFs get delayed it can negatively impact all crypto assets BTC is hovering around $42K and the plunge can hit the coin with another crash to the $39K level.
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.
Prior reports had hinted at an impending correction, suggesting the possibility 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, alongside a significant number of trader liquidations within the past 24 hours.
Recent Market Activity: A Look at Bitcoin and Altcoins
As of now, BTC hovers around $42,160 after exhausting earlier gains, with its 24-hour trading range spanning from $40,521 to $44,034. Meanwhile, 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 regained about half of those losses. This sell-off presented an opportunity for buyers eyeing lower prices to enter the market, attracting significant interest from investors. Overall, the total crypto market saw a 4.52% decline, totaling $73 billion down to $1,530 billion.
Investors are closely monitoring potential support levels for potential re-entry opportunities as the week progresses.
