The cryptocurrency market faced a significant downturn on Tuesday, with most digital assets trading in the red. Bitcoin, the market leader, dropped 7% from its year-high, leading to widespread caution among investors.
Bitcoin Stagnates, Pulling Altcoins Down
Bitcoin’s value fell to $96,254, marking a 3% decline. According to Alex Kuptsikevich, chief market analyst at FxPro, this stagnation adversely impacted altcoins.
“Bitcoin’s current lull serves as a corrective phase, helping to eliminate overbought conditions,” Kuptsikevich stated. He further added that this correction might pave the way for Bitcoin’s price to surge to $120,000, driven by the Fibonacci extension.
Ether and Altcoins Witness Sharp Declines
Ether experienced a 6% dip, trading at $3,687. Kuptsikevich noted that Ether might not encounter significant support until it reaches the $3,700-$3,800 range.
The altcoin market also suffered major losses, with GALA plummeting 20.7%. Approximately 70 of the top 100 cryptocurrencies fell by 15% or more, shrinking the total crypto market capitalization by 8%.
Ripple’s XRP dropped 15% to $2.10, while Solana’s SOL slid 6.6%, trading at $213.08.
Experts Predict Market Consolidation Amid Bearish Trends
“The pullback in the crypto market, with Bitcoin retreating to just above $96,000 and severe drops in altcoins, reflects mounting bearish pressure,” said Avinash Shekhar, co-founder of Pi42A. He expressed optimism that this phase might lead to healthy consolidation, setting the stage for another altcoin rally.
Shekhar emphasized the importance of re-establishing critical support levels, such as a $3.49 trillion market capitalization and Bitcoin’s $100,000 price, to restore investor confidence.
Massive Liquidations Hit the Crypto Market
Bitcoin’s sharp decline followed its recent rise to $100,000, spurred by optimism surrounding the incoming administration of President-elect Donald Trump. Despite the drop, Bitcoin remains up 25% over the past month.
Profit-taking by investors likely contributed to the sell-off, as many cashed in after the recent surge. This trend led to the liquidation of 580,559 traders, with a total value of $1.75 billion. Bitcoin liquidations reached $147.1 million, while Ethereum accounted for $221.8 million in long positions, according to CoinGlass.
Analysts View the Drop as a Consolidation Phase
Shahzad Nathani, head of operations and partnerships at Shardeum, highlighted the impact of declining trading volumes and profit-taking by long-term investors. These factors indicate a pause rather than a prolonged downturn.
Nathani suggested that traders focus on high-quality assets and maintain disciplined strategies to navigate this volatile phase, preparing for potential recovery.
Bitcoin’s Potential Path to $140K in a Bear Market
Despite the recent downturn, Finam analyst Nikita Stepanov believes Bitcoin has not reached its peak price in the current cycle. He forecasts that Bitcoin could climb to $140,000 even during this bear market, though surpassing $200,000 seems unlikely for now.
Stepanov predicts that Bitcoin may consolidate below the $100,000 level until mid-December, providing a solid technical foundation for further upward movement. He identifies the next target range as $112,000 to $130,000
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