Bitcoin is facing its first significant adjustment since early November, dropping 13% from its historic high of $108,364. This sudden pullback has sent shockwaves throughout the crypto market, shifting sentiment from extreme bullishness to uncertainty and even fear. The sell-off in altcoins has been particularly brutal, as many of them are suffering significantly while Bitcoin struggles to regain momentum.
CryptoQuant's key indicators highlight the severity of the situation, with total realized losses at $28.9 million, 3.2 times above the weekly average, which is shocking. The surge in realized losses indicates that some investors are exiting positions as the market readjusts after weeks of aggressive increases.
The biggest question now is whether this is just a healthy correction of the previously bullish trend or the beginning of a larger downtrend. Traders are closely monitoring Bitcoin's ability to maintain key support levels and the behavior of altcoins, which often magnify Bitcoin's price movements.
Currently, the market is at a crossroads, and the coming days may reveal whether Bitcoin can recover and regain its upward trend, or whether this adjustment signals a more prolonged period of weakness.
Bitcoin is facing selling pressure
Bitcoin is facing immense selling pressure after two days of aggressive bearish activity, marking a critical moment for the market. The sudden shift in sentiment has led many analysts and investors to become cautious, and as Bitcoin's recent trend begins to lose momentum, some are turning bearish. This adjustment has prompted the market to question whether the current price fluctuations are a natural pause or a precursor to deeper losses.
Top analyst Axel Adler recently shared insights on X, supported by compelling on-chain data, emphasizing that realized losses have soared to $28.9 million. This figure is 3.2 times higher than the weekly average, indicating increased selling activity. Adler's analysis highlights that while the sell-off appears concerning, it is consistent with a healthy market adjustment, especially after Bitcoin's significant rebound to $108,300.
Bitcoin has realized losses reaching $28M | Source: Axel Adler on X
Adler points out that the current decline should not trigger panic but serve as a moment of patience for long-term holders. He emphasizes that now is the time to HODL unless additional bearish signals suggest a more prolonged downtrend. Corrections like this often provide the necessary fuel for the next round of market increases, as weaker hands exit while stronger hands strategically position themselves.
Price trends remain crucial, with investors closely monitoring whether this adjustment lays a solid foundation for future growth or signals further downside.
BTC holds a bullish structure (currently)
After three consecutive days of aggressive selling pressure, Bitcoin is trading at $94,400. Despite the market being clearly overshadowed by bearish sentiment, BTC has still managed to hold its ground above the critical support level of $92,000. This support is crucial as it clearly defines the ongoing upward trend. Maintaining above this level indicates resilience, and if buyers regain control in the coming trading days, it sets the stage for a potential strong rebound.
BTC remains above the key demand of $92K | Source: BTCUSDT chart on TradingView
While recent price movements reflect uncertainty, the decline is not as severe as market sentiment suggests. Negative sentiment has prompted many traders to adopt a cautious stance, but BTC's ability to hold above $92,000 shows potential strength in market structure.
However, market sentiment remains a key market driver. Restoring confidence is vital for Bitcoin to recover higher levels and regain bullish momentum. If market sentiment does not improve and prices continue to decline, a deeper correction is more likely. Losing the support level of $92,000 may pave the way for a retest of lower levels, potentially leading to additional volatility.