Investors await US CPI data this week as analysts predict a potential Bitcoin drop to $37,500 in the coming days.
Following a lively week on Satoshi Street, Bitcoin and altcoins are now in a correction mode, with the broader cryptocurrency market retracting by over 3%. Bitcoin saw a dip of 7.5%, reaching $40,521, but later recovered to a 4% decrease, stabilizing at $42,095. Currently, Bitcoin is trading at $42,357, down 3.37%, with a market cap of $828 billion.
Market Liquidation and Bitcoin Momentum
Recent data from CoinGlass reveals a staggering $300 million liquidation in long positions across the broader cryptocurrency market, particularly impacting small-cap altcoins. The surge in Bitcoin’s momentum throughout the year, driven by expectations of regulatory approval for the first US spot Bitcoin exchange-traded funds (ETFs), has set the stage for a significant market correction.
The anticipation of regulatory milestones and speculations regarding potential interest rate cuts by the Federal Reserve have been pivotal in driving the upward trend in virtual currencies. Richard Galvin, co-founder at Digital Asset Capital Management, sees the recent market fall as a deleveraging process, attributing it to heightened market leverage rather than specific fundamental news.
Upcoming Challenges and Investor Preparations
Investors are bracing for impactful events this week, including crucial US inflation data and the Federal Reserve’s concluding policy meeting for 2023. These developments may pose challenges to bold speculations on potential rate cuts, influencing market dynamics.
Market analyst Tony Sycamore from IG Australia Pty suggests that profit-taking is a logical response to recent highs. He foresees potential declines toward the $40,000 to $37,500 range, expecting strong support from buyers eager to capitalize on the market dip.
Altcoin Rally Pauses Amid Market Corrections
Altcoins, notably, enjoyed a vibrant week marked by significant price rallies over the past seven days. However, the celebratory atmosphere seems to have taken a pause, with various minor cryptocurrencies experiencing declines.
Cryptocurrencies such as Ether (ETH), XRP, Polkadot, and Avalanche encountered setbacks. The index representing the top 100 digital assets saw a notable 4% drop, marking the most substantial decline since November 22.
Specific Altcoin Performance
Ether (ETH) itself witnessed a decrease of over 4%, while several tokens including FLOW, CRO, APETHETA, XTZ, NEO, TON, KAVA, and PYTH recorded 24-hour declines exceeding 10%. This shift indicates a temporary interruption in the recent bullish trend observed among altcoins.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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