Expert Forecast: Deep Correction Coming for Bitcoin and Ethereum?
With the crypto market in the red, is a deeper correction next for Bitcoin and Ethereum ? The crypto space has seen a significant sell-off in the last 24 hours, with Bitcoin down about 9% and Ethereum losing around 10%.
Where will the fix for Bitcoin stop?
Bitcoin recovered slightly after dipping below $59,000 and was most recently traded at $60,880.45, down 5.84% on the day. Ethereum dropped below $4,300, found support around that level, and the last trade was down 7.6% for the day at $4,303.3. The correction was a general one as cryptocurrencies like Solana , Binance Coin, and Cardano all suffered losses. The combined market cap of cryptocurrencies dropped below $3 trillion and most recently stayed at $2.8 trillion.
One of the reasons for the pullback was China’s state planner, the National Development and Reform Commission (NDRC), announcing on Tuesday that it will continue to block cryptocurrency mining. NDRC spokesperson Meng Wei said: “Virtual mining causes huge energy consumption and carbon emissions. No active influence to lead industry development or scientific progress. Regulating cryptocurrency mining activities, optimizing our industrial structure, saving energy and reducing emissions has important implications for achieving carbon emission targets.” China ‘s crackdown on crypto mining and trading caused the market to crash earlier this year as well.
However, this week’s pullback doesn’t seem likely to cause much panic in the market as Bitcoin and Ethereum both bottomed out. Craig Erlam, senior market analyst at OANDA, said: “I mentioned that a 5% increase in gold in a few weeks is very strong, as a sign of how different the different asset classes can be. However, the 5% drop in Bitcoin today is not an extraordinary development,” he said. The $60,000 level is currently acting as a solid support level, just $9,000 away from Bitcoin’s recent all-time highs.
“The cryptocurrency quickly found support around $58,500 after falling below $60,000, where it recovered just a few weeks ago,” Erlam said. However, the analyst warned that if Bitcoin drops further below the $60,000 level, it will face a more significant danger of selling: “A breakout of this level may signal a deeper drop, attention maybe back to the $50,000 region, but as always with BTC , this is never clear. “There is incredible support in the market and a big rally higher never seems that far away.”
Prominent economist Mohamed El-Erian revealed this week that he bought it when Bitcoin dropped to $3,000 a few years ago, but sold it for $19,000 a few months before it hit $60,000. “I felt compelled to buy it – I really did,” El-Erian told CNBC. I felt like I had to. I had this level. “I had an entry point,” he said. El-Erian noted that he would buy again once some of the speculation was cleared from the market. “You really don’t want to ask me about valuations because I don’t quite understand why $60,000 instead of $68,000 is the right level,” El-Erian said.