Bitcoin fell below $43,000 for the first time since February 2021, causing a 10% correction in the cryptocurrency market in the last 24 hours. The two largest cryptocurrencies also seem to be having a hard time maintaining the uptrend. While Bitcoin Price is struggling to move above $50k and find a direction recently, Ethereum also has drastically dropped from its recent ATH of $4372. With all the signals and market trends hinting towards a bearish rally traders should first look at the facts and figures before jumping into conclusions.
Ethereum Price has gained 124.47% in the market since April 18th. The asset has broken through several main stages, and the current corrections can be viewed as an ideal reset. The asset is now retracing from the fundamentally bullish 0.5 Fibonacci axis. The Relative Strength Index, or RSI, is also approaching a neutral level, which it last reached before the rally in early April.
The correction isn’t quite outright bearish structurally. Following the price drop, the amount of Ethereum kept on exchanges has remained strong, suggesting little selling pressure.
Should traders be alarmed about the Bitcoin correction?
As for bitcoin in terms of correlation between DJI and SPX, as well as their mutual uncorrelation with the largest crypto asset, the below comparison chart between Bitcoin vs SPX vs Dow Jones is descriptive. In the past, the conventional stock market has helped the crypto market rebound, but the current uncorrelation indicates that the sell-off is endogenous rather than caused by external factors. Bitcoin miners, on the other hand, aren’t bearish.
The Bitcoin Miner’s Position Index has been below 1 since the beginning of March, according to results. An MPI index of more than 2 indicates that miners are selling vigorously in the market. Its continued location below 1 indicates that miner sentiment has shifted in the short term, but the sector remains bullish in the long term.
One minor question posed by Ki-Young Ju, CEO of CryptoQuant, was the possibility of a whale dump in the last 24 hours. As the market shuffles out poor hands, a whale dump is normally followed by a time of correction.
Right now the traders need not panic. Although a drop below $46,000 is unfavorable, Bitcoin is still trading above its long-term support level of $42,000. The asset has been able to encourage a recovery towards the $45k range as of press time, but it should ideally begin a place above $46.5k within the next few days.