Is the recent drop in Bitcoin a sign of a crash coming soon, or is it just a normal correction?
Bitcoin dropped below $117,000 today, a loss of almost 2%. Yesterday, it hit an all-time high of $123,100.
The market was under pressure to sell because 7,843 BTC ($923 million) went to major exchanges and 9,000 BTC ($1.06 billion) went to Galaxy Digital. Within four hours of breaking through the key support levels, long positions worth $406 million were sold.
As traders moved to larger cryptocurrencies, MemeCore and other meme coins lost a lot of value. The fact that the total value of all cryptocurrencies dropped by 3.5% to $3.68 trillion is a good sign that the current bull market is correcting itself, according to analysts.
Why did Bitcoin go down after it hit a new high?
Bitcoin fell below $117,000 today after hitting an all-time high of $123,100 yesterday. In the last day, the top cryptocurrency dropped by almost 2% as traders started to cash in on recent gains.
The selloff got worse when a lot of money moved from wallets that weren’t being used to the market. Galaxy Digital got 9,000 Bitcoin, which is about $1.06 billion.
7,843 more Bitcoin worth $923 million were sent to well-known exchanges like Binance and Bybit. These transfers from older Satoshi-era wallets made it possible to sell more wallets.
What part did liquidations and whale wallets play?
The selling pressure broke through Bitcoin’s key support levels of about $118,000. This breach caused a lot of forced sales in the market.
In less than four hours, long positions worth about $406 million were sold. Prices went down because traders had to sell their positions.
The drop happened faster because of high-leverage positions. When prices went down, even by a little, many traders had to sell their stocks, which made the pressure to sell even more.
The meme coin rotation keeps going
During today’s sell-off, meme coins like MemeCore and others saw big drops. MemeCore fell 35% because traders moved their money to safer assets.
The rotation favored cryptocurrencies that are more well-known, like Bitcoin and Ethereum. When things are unstable, this change usually means that people are putting their money into safer investments.
Is this correction a sign of a change or just a break?
Analysts say that today’s drop is just a normal correction after Bitcoin’s recent rise. People who watch the market say that the overall trend for Bitcoin and the cryptocurrency market as a whole is still good.
Even though prices have dropped, people are still interested in the market as a whole.
The drop happens just as US lawmakers are getting ready to vote on important cryptocurrency policy this week. Even though the overall policy environment is still good, regulatory uncertainty often makes short-term volatility worse.
There is still a lot of business and trading going on on all of the big exchanges. People in the market are waiting for the next move as prices settle down.
Also read: Why Bitcoin’s Scarcity Makes Now the Perfect Time to Buy
