Bitcoin Correction: Market Sentiment Turns Negative
Investor concerns have been highlighted by massive outflows from exchange-traded funds, a decrease in institutional and retail market interest, and heightened selling pressure from whale activity. Therefore, a lot of people are wondering if the cryptocurrency market has entered a bear market. In this regard, Bitcoin dropped below $95,000 on Friday morning, according to CoinMarketCap data. It dropped 6.16% during the day and more than 24.46% since just five weeks ago, when it hit a record high of $126,198. Over $1.24 billion in cryptocurrency long positions were liquidated during the market’s 24-hour drop, according to CoinGlass statistics.
Investor Confidence Wanes as Bitcoin Tracks Bearish Pattern
Since its Monday highs, the bellwether cryptocurrency has dropped more than 10%. It is now on course for a third consecutive weekly down-close candlestick due to this decline. Investor confidence is also declining, as evidenced by the Myriad prediction market’s downward trajectory. The likelihood that Bitcoin would hit $115,000 on Myriad before falling below $85,000 has decreased from 71% just four days ago to 46%.
Judging by market movements over the past three months, we must conclude that we are currently in a bear market. Put options have now gained the upper hand following Bitcoin’s breach below the $100,000 mark today,
Adam Chu, chief researcher of GreeksLive
Bitcoin’s Death Cross Signals Potential Start of Bear Market
Overall, the future of the cryptocurrency market is still bleak. Therefore, this is among the worst results in the fourth quarter. A death cross, which is a bearish indication when the 50-day simple moving average crosses below the 200-day moving average, has formed as a result of Bitcoin’s persistent decline from its record high of $126,000 to below $96,000. It shows that short-term momentum is waning more quickly than long-term momentum. It is believed that the signal signals the beginning of a bear market.
It’s less about calling tops and bottoms and more about recognizing that crypto is transitioning from an overheated environment into a more measured one. We’re in a corrective phase within a broader cycle.
Shivam Thakral, CEO of BuyUCoin
A few important drivers, like economic data, legislative changes, and Bitcoin’s on-chain strength, will be crucial, Thakral continued. Whether this downturn develops into a full-blown bear market will depend on these elements.
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