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While the BTC and Ether prices try to stabilize, altcoins like XRP, Cardano, Solana, and Polygon continue to extend losses further.
Last week, the broader cryptocurrency market entered a sharp correction with the Bitcoin price breaking crucial support levels and falling down to $26,000. Along with Bitcoin, the broader crypto market entered into a steep correction with a greater fall in the altcoin market.
Currently, Bitcoin and Ether continue to stay relatively steady while other altcoins have continued with further price drops. On Monday, altcoins exhibited more substantial downward movements. Ripple’s XRP experienced a decline of nearly 5%.
Altcoins connected to Ethereum rivals, namely Solana, Polygon, and Cardano, saw losses of approximately 3% each. DeFi tokens also faced declines, with the Cosmos token dropping over 3% and Uniswap’s coin showing a 2% decrease. Chris Martin, head of research at Amberdata said:
“External pressure in China is likely the biggest driver to the sell-offs. Asia plays a huge role in crypto, especially with Hong Kong and Singapore opening the door, but with a wider economic downturn, I don’t think we’ll see the bull market play out like we hoped or expected.”
“As for bitcoin and ether, they tend to act more as a store of value compared to other cryptocurrencies, but they’ve also suffered from a significant drop – 11.5% and 9.8%, respectively, since the last 7 days – so they’re completely immune. In general, altcoin swings are more prominent, and I think as more institutions onboard – through spot ETFs, spot investments, derivatives – we should see these tokens’ volatility subside a bit more.”
Is Further Bitcoin Price Correction Possible?
During the third quarter, Bitcoin had been relatively inactive, which aligns with its historical trend of weakness during this period. At present, its value has declined by 14% for the quarter and approximately 10% for August.
Market observers anticipated that an authorized spot bitcoin exchange-traded fund or well-defined cryptocurrency legislation from Congress might introduce positive market volatility. However, a shift in the Federal Reserve’s focus towards real rates and the U.S. bankruptcy protection filing by China’s Evergrande have both contributed to downward pressure on the cryptocurrency market.
Some of the on-chain indicators suggest that the BTC price could undergo further correction. Popular crypto analyst Ali Martinez writes:
“Each time $BTC has broken below the 200-day SMA over the last 10 years, it often drops to touch the Realized Price. Right now, the Realized Price is around $20,350.”
“Meanwhile, watch the $25,200-$24,800 zone closely. Breaching this pivotal support might pave the way for a #BTC dip to $20,000,” added he.