The crypto community is unsure of what to expect with the new developments in the space. When Bitcoin skyrocketed in early January, most opined that it was overbought, thereby necessitating a price correction. Experts assured the space that analysts expected the price drop, so there was no need to panic.
Following the price drop, more corrections caused panic amongst traders, leading to continuous selling pressure. Traders were unwilling to forgo returns, which made them sell at an alarming rate to keep returns on their investments. Recently, Bitcoin saw some more shocking price corrections, which is gradually sending it back to the $20,000 range if its support level does not hold.
The crypto industry witnesses significant market cap shrinkage
Bitcoin is not alone in the current price correction as Ethereum faces a price decrease. Some hours ago, Bitcoin dropped from its $30,000 to around $29,000, hinting that the next correction could hurt the asset’s value significantly. Ethereum, which had surged frequently, faces new price corrections, dropping it from its earlier $1,300 to around $1,200 on major exchanges.
Following the widespread correction, the industry market price moves to $800 billion. This year, the industry announced its $1 trillion market cap stat, following the surge in digital asset prices. Unfortunately, that feat is short-lived, with the price drop that wiped almost $200 billion from the industry.
Yesterday, Bitcoin showed signs of moving into the consolidation period, but with further price decrease, it could mean that Bitcoin saw a bearish trend. Technical analysis sees a certain support level that holds it even during its quick $29,000 drop.
The chart is below the -100, indicating a possible asset overbuying by investors looking at the CCI. This time is critical because if the bears gain momentum, they could drop the price to $20,000. On the flip side, if the bulls can push the asset, the digital investment could retake its ATH.
Experts predict a price surge
Despite the current situations, experts see Bitcoin surging to reclaim its previous position due to the bullish growth trend. Although BTC started 2021 with high volatility, current indications show that the asset was slowing down, meaning that it would finally stabilize, either following the bearish or bullish trend.
The cause of the recent price correction is still unknown, but sources claim that selling pressure might be increasing. A few weeks ago, the industry witnessed some continuous selling pressure, resulting in large trading volumes on most trading platforms.
If Bitcoin surges, traders believe that the altcoins would gain some solid grounds to increase. Some pointed out the benchmark asset’s correlation with other assets, being a major cause behind the uniform price corrections. Sometimes when Bitcoin rises, other cryptocurrencies record new gains, showing Bitcoin’s importance in the industry.
The recent market cap drop was because Bitcoin saw significant price drops, making up 70% of the market cap’s value. For the market cap to return to its previous position, BTC must reclaim its $40,000 price mark.
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