Why Crypto is Down Today? Market Correction Hits Bitcoin and Altcoins
Qadir AK13 Nov 20242 min read
After an impressive rally in large-cap altcoins fueled by Bitcoin’s (BTC) recent spike above $89,000, the crypto market saw a sharp downturn over the past 24 hours. As Bitcoin’s price dipped briefly below $85,200 on Tuesday, the total crypto market cap fell by 3%, settling at around $3.06 trillion during early Wednesday trading in Asia.
With most analysts still bullish on the long-term crypto outlook, traders are cautioned to prepare for potential 20-40% dips along the way.
To understand the forces behind this market movement and to gain insights into what lies ahead, let’s dive deeper into the cause of the dip.
What’s Driving Today’s Crypto Selloff?
Leveraged Market Cool-off
The crypto market has recorded over $2 billion in forced liquidations over the past three days, with most of the pain felt by long traders amid rising volatility. In just the past 24 hours, about $928 million in liquidations were triggered, hitting long positions especially hard.
This wave of liquidations has cooled the recent short squeeze, and many traders are now looking for a midterm correction. Data from Binance shows that over 51% of leveraged traders are now taking short positions, reflecting reduced optimism for an immediate market recovery.
Read more about the detailed crypto prediction 2025 and what to expect for Bitcoin and altcoins.
Major Shift from Crowd’s Sentiment
Following the Bitcoin price breakout triggered by the victory of Donald Trump in the United States, the fear of further crypto capitulation has significantly diminished. Bitcoin and Ethereum’s fear and greed index had rallied above 80 percent, suggesting extreme greed in the market.
Adding to the positive mood, U.S. spot Bitcoin ETFs have brought in over $8.7 billion in net cash inflows in the past month. Institutional players are also showing confidence, with MicroStrategy recently beginning its bid to acquire up to $42 billion worth of Bitcoin, starting with an initial $2 billion purchase.
Is A Market Correction Coming?
While the current market sentiment is optimistic, history suggests that the crypto market often sees corrections when bullish enthusiasm becomes extreme.
Based on historical trends, Bitcoin’s dominance is expected to remain strong against the altcoin market until the first few weeks of January 2025. In this regard, Bitcoin price is expected to find a crucial support range between $83,250 and $85,800 where 312k addresses purchased 282k BTCs.
Although Bitcoin’s rally may pause, several major altcoins have shown signs of continued strength. Dogecoin (DOGE), Solana (SOL), and Ethereum (ETH) have all seen strong gains, suggesting that the altcoin market could continue to build momentum as we approach the new year.
Now is the time to refine your trading strategies and prepare for the next market move.
