The cryptocurrency market has initiated a healthful correction. Crypto prices can show sharp fluctuations, therefore the main thing to understand is that this stage was needed to continue the rally. Technical indicators are within the extreme overbought territory for too long. The rally began to “choke up” on the thanks to $20K. This is often a really serious psychological and technical level of resistance for the market, and there was little question that this obstacle would test investors’ optimism.
At the reporting time, the price of the leading cryptocurrency Bitcoin [BTC] has declined by over 10% and is changing hands at $17,386 USD completely losing its positive price dynamics for the past week.
The technical indicators, along with the Fear & Greed Index and RSI, which have long been in an overbought state, have worked well, almost like June 2019, when the correction began.
The rally started within the area at $10K up to the ceiling at $19.5K. The rollback to $16K is within the scope of the Fibonacci correction, but a rapid decline below that level will wipe out all the upward movement of October-November.
It seems that some investors decided to still take the advantage of growth within the run-up to the weekend in the U.S. Earlier in 2017, the Bitcoin rally abruptly rotated just before Christmas. Perhaps this is often due to expectations that a lot of retail investors will take profit in “fiat” after the expansion. But this movement is unlikely to possess been generated by retail investors.
As reported earlier, shortly prior to the correction began, the All Exchanges Inflow metric revealed a rise in bitcoin placement on exchanges, which may be a direct indication of the whales’ intention to sell their assets. This promises increased turbulence within the near future.
Altcoins have recently shown far more positive dynamics than Bitcoin, gaining many percent in only a couple of days. Of course, they’re now declining faster than before. Within the day, retail investors can find great opportunities to enter with an outsized discount in price.