With Bitcoin crashing to support at $58,000 and most cryptocurrencies down at least 10%, is this the start of a more extensive correction for crypto, or is this just a shake-out of the weak hands before crypto continues on its bull run?

cryptodaily.co.uk

Bitcoin is currently back over $60,400 after a 2-day drop that took it from $66,300 down to a local low of $58,570, an 11.7% correction. The global crypto market cap also saw a loss of 10% in the last 24 hours to take it down to $2.7 trillion as per CoinGecko.

Reasons for the crypto dip?

There don’t appear to be many fundamental reasons for the dip. The SEC rejected the VanEck Bitcoin Spot ETF recently, which could possibly have changed the minds of some institutions who were looking for this to happen.

The Chinese authorities announced that they would be considering punishing the last vestiges of crypto mining in the country with punitive prices on the electricity bought by the miners.

Biden signed off on the infrastructure bill that could have quite serious implications for the regulatory environment surrounding crypto. The bill became law yesterday, and it’s not known if a new stand-alone bill will be able to narrow the scope of those who have to report tax data to the IRS.

However, when all is said and done, this is very likely already priced into the market, and there doesn’t appear to be anything else particularly at odds with crypto currently, and given that price just doesn’t keep rising, we were probably due for a healthy correction.

Also, one very likely rationale may well be the extremely high amount of leverage still in the market. The previous dip over the last week just didn’t have enough punch in it to clear out anything like a reasonable quantity of retail speculators.

According to the liquidation data on Coinglass, over the last 24 hours 214,000 traders were liquidated with a loss for them of $875 million. Maybe still not enough to really reset the crypto market, but this would have helped.

What next?

Bitcoin is already making its way back up. It’s currently sitting at around $60,800 at time of writing, and it appears that the very strong support at $58,000 has done its job for now.

That’s not to say that there won’t be a bit more choppiness over the next few days, and bitcoin still has to rise back above some flipped resistance at its current level.

For those holding long-term, this is probably the smallest of little bumps along the way, and when we are once more back to the $68,000 highs, hold on to your hats, as the next few weeks can see some extremely strong upside.

12 Replies to “Crypto ready to go lower, or just a shake-out?”

  1. Hello There. I found your blog using msn. This
    is a very well written article. I’ll be sure
    to bookmark it and return to read more of your useful info.
    Thanks for the post. I’ll certainly return.

  2. This is the right blog for everyone who wants to understand
    this topic. You realize a whole lot its almost hard to argue
    with you (not that I personally would want to…HaHa).
    You certainly put a fresh spin on a subject that’s been discussed for years.
    Excellent stuff, just great!

  3. Yesterday, while I was at work, my sister stole my apple ipad and tested to see if it can survive a twenty
    five foot drop, just so she can be a youtube sensation. My apple
    ipad is now broken and she has 83 views. I know this is entirely off
    topic but I had to share it with someone!

  4. I love what you guys are usually up too. Such clever work and reporting!Keep up the wonderful works guys I’ve incorporated you guys to ourblogroll.

  5. I loved as much as you’ll receive carried out right here.
    The sketch is tasteful, your authored material stylish.
    nonetheless, you command get bought an impatience over that you wish be delivering the following.
    unwell unquestionably come more formerly again as exactly the same nearly very often inside case you shield this hike.

  6. Hey! I could have sworn I’ve been to this site before but after browsing through some of the post I realized it’s new to me.
    Anyways, I’m definitely glad I found it and I’ll be bookmarking and checking back frequently!

  7. all the time i used to read smaller articles that also clear their motive, and thatis also happening with this paragraph which I am reading at this time.

Leave a Reply

Your email address will not be published.