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Following a significant celebration on Satoshi Street in the previous week, both Bitcoin (BTC) and alternative cryptocurrencies are now grappling with a downturn as the broader cryptocurrency market undergoes a correction of more than 3%.
Bitcoin (BTC) witnessed a descent of up to 7.5%, plummeting to $40,521, only to recover some of its losses and stabilize at a 4% decrease, currently trading at $42,095. At present, Bitcoin (BTC) is experiencing a 3.37% decline, with its price standing at $42,357 and a market cap of $828 billion.
$300 Million Liquidation As Bitcoin (BTC) Corrects
As per the data from CoinGlass, nearly $300 million in long positions have been liquidated over the past four hours. This is across the broader crypto market with the small-cap altcoins witnessing an even greater fall.
Bitcoin has experienced significant momentum this year, fueled by anticipations of regulatory approval for the first US spot Bitcoin exchange-traded funds (ETFs), which could broaden the scope of potential cryptocurrency investors.
Additionally, speculation about potential interest rate cuts by the Federal Reserve in the coming year has further contributed to the upswing in virtual currencies. Speaking to Bloomberg, Sydney-based Richard Galvin, co-founder at Digital Asset Capital Management said:
“Market leverage had risen materially. The current fall looks like a market deleveraging as opposed to any fundamental news catalyst.”
Investors are also preparing for significant events this week, including US inflation data and the Federal Reserve’s concluding policy meeting of 2023. These developments could further challenge bold speculations on potential rate cuts.
Moreover, Tony Sycamore, a market analyst at IG Australia Pty, suggests that profit-taking is a logical response, and he anticipates that declines toward the $40,000 to $37,500 range will find strong support from buyers looking to take advantage of the dip.
Altcoins Face Bigger Drop
Altcoins, particularly, have had a gala week with sharp price rallies over the past seven days. However, it seems that the party has come to a halt for the time being.
Minor cryptocurrencies, including Ether, XRP, Polkadot, and Avalanche, experienced declines. The index reflecting the top 100 digital assets witnessed a drop of approximately 4%, marking the most substantial decline since November 22.
Ether (ETH) exhibited a decrease of over 4%, while various tokens like FLOW, CRO, APETHETA, XTZ, NEO, TON, KAVA, and PYTH recorded 24-hour declines surpassing 10%.
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