Bitcoin has encountered a significant correction for the first time since early November, dropping 13% from its historical high of $108,364. This sudden correction sent shockwaves through the entire cryptocurrency market, with market sentiment shifting from extreme bullishness to uncertainty and even fear. The sell-off has been particularly brutal for altcoins, as many have suffered severe losses while Bitcoin struggles to regain momentum.
Key indicators from CryptoQuant highlight the severity of the situation, with actual total losses reaching $28.9 million, which is 3.2 times higher than the weekly average, shocking. The surge in actual losses indicates that some investors exited their positions during the market's significant rally over the past few weeks.
The biggest question now is whether this is just a healthy adjustment within the bullish trend or the beginning of a larger downward trend. Traders are closely watching whether Bitcoin can hold the key support level and how altcoins perform, as these often amplify Bitcoin's price fluctuations.
The market is still at a crossroads, and the coming days may reveal whether Bitcoin can recover and resume its upward trend or if this adjustment foreshadows a longer period of weakness.
Bitcoin faces selling pressure
After two days of aggressive bearish activity, Bitcoin is facing immense selling pressure, marking a critical moment for the market. The sudden shift in sentiment has led many analysts and investors to become cautious, as Bitcoin's recent trend begins to lose momentum, prompting some to turn bearish. This adjustment has led the market to question whether the current price movements are a natural pause or a precursor to further declines.
Top analyst Axel Adler recently shared insights on X, supported by compelling on-chain data, emphasizing that actual losses have soared to $28.9 million. This figure is 3.2 times the weekly average, indicating intensifying sell-off activity. Adler's analysis highlights that while the sell-off may seem concerning, it aligns with a healthy market adjustment, especially following Bitcoin's significant rise to $108,300.
Adler points out that the current decline should not trigger panic but rather serve as a moment of patience for long-term holders. He emphasizes that now is the time to accumulate, unless more bearish signals indicate that the downward trend will continue for an extended period. Such adjustments often provide the fuel needed for the next round of upward movement, as weaker investors exit while stronger investors strategically position themselves.
Price movements remain critical, as investors closely monitor whether this adjustment can lay a solid foundation for future growth or signal further declines.
BTC holds a bullish structure (currently)
After facing strong selling pressure for three consecutive days, the trading price of Bitcoin is $94,400. Despite the market being clearly overshadowed by bearish sentiment, BTC has still managed to maintain above the critical support level of $92,000. This support level is crucial as it clearly defines the ongoing upward trend. Staying above this level indicates resilience and lays the groundwork for a potential strong rebound if buyers regain control in the coming trading days.
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 stay above $92,000 indicates that the market structure has potential strength.
However, sentiment remains a key market driver. Restoring confidence is crucial for Bitcoin to return to higher levels and regain its bullish momentum. If sentiment does not improve and prices continue to decline, the risk of a deeper correction will increase. Losing the $92,000 support level could pave the way for a retest of lower levels, potentially leading to additional volatility.
