The cryptocurrency market led by Bitcoin’s meteoric rise and the sudden interest spike in altcoins like Solana is facing a significant correction. Recent data suggests a downturn in momentum prompting concerns among investors and analysts alike.
Bitcoin’s recent decline to a 13-day low hovering below $64,500 has set a cautious tone for the broader market. This decline follows a period of heightened volatility with the total liquidations surpassing $600 million on a daily scale. Altcoins have fared even worse experiencing substantial losses across the board.
Technical analysis indicates a bearish swing failure pattern in Bitcoin’s price with the cryptocurrency closing below its previous all-time high of $69,000. This pattern which is coupled with a slowing momentum and profit-taking behavior among investors has led to a decline in the total cryptocurrency market capitalization from $2.89 trillion to $2.35 trillion.
Bitcoin’s price trajectory has been turbulent in recent days. After reaching an all-time high of nearly $74,000 the asset failed to sustain its momentum. A series of declines saw Bitcoin struggling to maintain levels above $70,000 eventually leading to the current downturn.
Despite finding support at crucial levels including Fibonacci retracement zones the overall trend suggests a waning of buying pressure. This trend is further exacerbated by bearish signals such as the breach of minor swing lows and prolonged bearish divergence.
The landscape worsened as altcoins followed suit with Ethereum dropping below $3,400 and Solana experiencing a 9% decline to $172 at press time. Meme coins such as DOGE and SHIB also suffered significant losses highlighting the broad-based nature of the market correction.
Moreover, on-chain analysis indicates profit realization among short-term holders adding to selling pressure in the market. While this surge in profit-taking may signal a healthy market cycle it also introduces concerns regarding excess supply and its potential impact on price dynamics.
According to recent reports, Bitcoin experienced an unexpected drop on BitMEX on Monday evening. The price plunged by 87%, dropping from an opening price of $68,398 to a shocking low of $8,900. This occurred at 22:30 UTC after an enormous sell order was placed.
The recent decline in Bitcoin’s price is accompanied by a wave of liquidations underscoring the risks associated with leveraged trading. Over 242,508 traders have been liquidated in the past day with losses totaling millions of dollars. This widespread margin squeeze reflects the volatile nature of the cryptocurrency market and the challenges faced by leveraged traders.
