The excitement in the crypto market faded on January 11 following the steep fall of altcoins, majority over 20%, as Bitcoin plunged below $35,000. After dropping below the psychological support level of $40,000 on January 10, Bitcoin (BTC) faced an increase in selling pressure, which caused the price to hit $30,229 before rebounding to $34,000 levels.
The sharp drop in the price of Bitcoin triggered liquidation of over $2.70 billion worth futures contracts and the big candles on the price chart indicates the plethora of liquidations that happened at a quick rate as the price fell from $41,000 to $32,229.
Mark Cuban, who owns Dallas Mavericks, used the retracement as an example and stated that the crypto market’s price movement is similar to the internet bubble in 1990s.
Cuban stated that “Watching the cryptos trade, it’s exaclty like the internet stock bubble.” However, he also mentioned that Ether (ETH), Bitcoin (BTC) and few more cryptos will rebound and appreciate similar to stocks such as eBay and Amazon.
Experienced players Celsius CEO Alex Mashinsky, for example, consider the latest price decline as a healthier move. Mashinsky opined that Bitcoin could decline even up to $16,000 before taking a U-turn.
The traditional financial sector also found itself under pressure on Monday as the political situation in the United States continues to generate tension and uncertainty about the future of the country and the economy.
The conventional financial sector also came under selling pressure earlier this week due to the uneasiness in the US political scenario and uncertainty about the global economy.
Whenever Bitcoin declines sharply, doom sayers, no-coiners and bears start forecasting the end of the numero uno crypto.
Bearing in mind, Bitcoin rallied from a mere $17,586 on December 11 to all-time high of $41,950 within a month, David Lifchitz, CIO at ExoAlpha regards the retracement as a “healthy correction by smart institutions who bought BTC from $20,000 on the way up to $30,000.”
Lifchitz told Cointelegraph:
“One worrying sign was not that Bitcoin price was rising, but its velocity, i.e. the speed at which it did move. From mid-December to end of December 2020, the median amplitude of the daily moves in Bitcoin doubled to 8.1%, then it almost doubled again from Jan.1st, 2021 to Jan.10th to 15.3%. The larger the amplitude, the more exchanges took place through the day between buyers and sellers.
This is a healthy correction though to purge the excessive growth of the last 10 days, allowing Bitcoin to build a new base toward $50k and above.”
Technical patters shared on social media platforms give a clue about the momentum that drives prices in recent times. As per Joshua Frank, CEO and founder of TheTie, an unique data analytics platform, the dearth of Bitcoin pointed out via Twitter last month shows that only a handful of huge investors were pushing the prices upwards.
In private comments to Cointelegraph Frank said:
“On January third, both Bitcoin and crypto 24-hour tweet volume hit an all-time high. Retail interest has continued through the second week of January and monthly average Twitter conversations around Bitcoin are now at an all-time high in January. Unsurprisingly, this surge in Twitter activity has corresponded with a local top on Bitcoin.”
Ether (ETH) was also under selling pressure, with the price declining to a low of $914 before rebounding to $1,102.37 at the time of writing this article. Major crypto tokens which have bounced back into the positive territory are Tether (USDT-$0.997, 0.7%), Ripple (XRP-$0.3014, 6.4%), Cardano (ADA-$0.2933, 4.9%), Polkadot (DOT-$8.33, 2.7%), Stellar (XLM-$0.2940, 13.3%), Monero (XMR-$169.38, 6.8%), Theta Network (Theta-$1.94, 11.1%), Compound (Comp-$189.54, 10.6%) and Zilliqa (ZIL-$0.067, 5%).
The overall cryptocurrency market cap now stands at $969.52 billion and Bitcoin’s dominance rate is 68.9%.
