Crypto Crash Continues on Thursday
Cryptocurrencies, including Bitcoin and various altcoins, are experiencing a dramatic drop as investors are reportedly taking the opportunity to secure their profits.
Cryptocurrencies like Bitcoin and various altcoins took a hit on Thursday, with the recent rally losing steam.
Oh no, not again! Bitcoin tumbled briefly dipping below $104,000, as the total market value of all coins fell by 1%. The overall market cap currently stands at a whopping $3.27 trillion. Some of the hardest-hit altcoins include questionable coins such as Fartcoin, Dogwifhat, Jupiter, and Ethena.
Analysts point to the ongoing pullback as a typical event that takes place during bull markets. As investors start to cash-out on their profits, a short-term sell-off ensues. This pattern is quite normal in bull cycles, where rapid gains often pave the way for a wave of corrections as traders seek to reduce risk in their portfolios.
In an exclusive statement to our website, Ryan Lee, Chief Analyst at Bitget Research, explained:
"Obviously after an extended period of notable gains, investors are taking their profits off the table, triggering this temporary downturn. This behavior is usual in bull cycles where sharp rallies often lead to a series of corrections as traders reposition their portfolios."
Lee also mentioned that ongoing geopolitical issues like trade tensions coming from the US and other uncertainties have contributed to the market's instability and fostered a risk-averse sentiment. He added:
"While the outlook for digital assets remains optimistic, the recent price action suggests we might be experiencing a cooling period, especially with speculative altcoins that have witnessed substantial gains. The general sentiment among investors is slowly being adjusted in response to these events."
Historically, Bitcoin tends to retreat following a significant resistance level, often leading to a broader market correction among altcoins. For example, BTC hit an all-time high of $108,335 in December only to drop to $88,987 in January. It later skyrocketed to a new record high of $109,300 in the same month.
Will Bitcoin Bounce Back?
Technical indicators hint that Bitcoin might be gearing up for another rally, which could instigate a broader altcoin recovery. On the daily chart, BTC is gradually constructing a bullish flag pattern, characterized by a steep upsurge (the flagpole) followed by a downward-sloping consolidation channel (the flag). This pattern is generally viewed as a continuation pattern.
Furthermore, Bitcoin has formed a cup-and-handle pattern with the most recent dip serving as the handle. The cup phase has a depth of roughly 30%, or 34,000 points.
Using traditional technical analysis, the projected target for a successful cup-and-handle breakout is calculated by adding the cup's depth to its upper boundary. In this case, adding $38,000 to the top of the pattern results in an expected target of $146,000.
Ethereum Trends and Wall Street's Demand
When it comes to Ethereum, the story is a bit different. Despite the overall market downturn, Ethereum's showing some resilience, thanks to growing demand from Wall Street.
Stay tuned for more updates as we continue to monitor the ever-changing world of cryptocurrencies!
- The ongoing cryptocurrency market downturn has caused Bitcoin to tumble briefly, dropping below $104,000, with a total market value of all coins falling by 1%.
- Ryan Lee, Chief Analyst at Bitget Research, stated that this temporary downturn is typical in bull cycles, as investors cash-out their profits, leading to a short-term sell-off and corrections.
- Despite geopolitical issues contributing to market instability, Lee believes that the outlook for digital assets remains optimistic, with a potential cooling period for speculative altcoins.
- Technical indicators suggest that Bitcoin might be preparing for another rally, which could instigate a broader altcoin recovery, with the projected target for a successful cup-and-handle breakout being $146,000.
- While the overall market is struggling, Ethereum shows some resilience due to growing demand from Wall Street.
