- Bitcoin’s price drop triggers a 3% decline in total crypto market cap.
- Over $2 billion in forced liquidations impact crypto, shifting market sentiment.
- Institutional inflows and altcoin gains suggest potential for future rallies.
The crypto market faces a minor correction after Bitcoin set its ATH at $89,956.88, just a few short numbers below the 90,000 price target. Despite its current price holding at $87,314, the price of BTC dipped as low as $85,200 yesterday leading to a few panicked traders questioning if the bull run was losing steam.
To this, many seasoned traders remained resolute in their outlook of Bitcoin (BTC) blowing past the $90,000 price mark and hitting its next target of $105,000 in the coming days. For now, most analysts continue to hold and watch the market closely. Still, the dip is not to be taken lightly as the crypto market fell by 3%,
Reasons Behind the Market Pullback
One of the biggest reasons behind the selloff is caused by the recent cooldown in the leveraged market.In detail, the past three days have seen over $2 billion in forced liquidations across crypto, with $928 million wiped out in the last day alone.
This shift has led to a reduction in the initial short squeeze, with many traders now anticipating a midterm market correction. On the popular crypto exchange Binance, 51% of leveraged positions are short, suggesting a cautious outlook on further rally potential.
Market Sentiment and Institutional Inflows
Bitcoin’s recent breakout, spurred in part by the U.S. election results favoring pro-crypto candidate Donald Trump, has encouraged renewed market confidence. The Fear & Greed Index for Bitcoin and Ethereum has surpassed 80%, indicating extreme greed.
Over the past month, US-based Bitcoin ETFs recorded a net inflow of $8.7 billion, with MicroStrategy making a notable move by initiating a $2 billion BTC acquisition as part of a larger $42 billion plan.
Midterm Market Outlook
Bitcoin is projected to maintain dominance over altcoins until early January 2025, with support expected between $83,250 and $85,800, where approximately 282,000 BTC were acquired by 312,000 addresses. Accordingly, altcoins like DOGE, SOL, and ETH are expected to continue building on recent gains, potentially setting the stage for another bullish breakout.
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