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The cryptocurrency market is experiencing a significant correction that is not stopping. With over $500 million worth of positions liquidated, traders wonder if this signals the end of the recent bull market.
A sharp sell-off prevails on the market, as indicated by the high number of liquidations. Within just a 24-hour window, liquidations have mounted, with Bitcoin (BTC) witnessing $107.14 million in liquidations and the total volume of liquidation exceeding $500 million.
Bitcoin's price performance
Bitcoin has clearly retreated from recent highs, currently sitting below the $60,000 mark. On the chart, BTC shows it has fallen below the short-term moving averages, which typically act as support levels. This could indicate that the bullish momentum has weakened.
It reveals a sharp decline from a peak, with the price now approaching the 50-day moving average (around $56,276). If this level fails to hold, the next significant support is near the 100-day moving average (around $51,819). A breach below this level might lead to increased selling pressure, potentially indicating a more extended bearish phase.
This prolonged correction is unsettling for the market, as it indicates that investor sentiment may be shifting from overwhelmingly positive to cautious, if not outright pessimistic. It is a worrisome sign, particularly when the market was expected to stabilize after an initial correction at around $70,000.
The current severity of volatility has taken many by surprise. As the market navigates through this severe correction and faces a potential trend reversal, it is crucial for participants to stay cautious and, most importantly, as liquid as possible. Focusing on the longer-term outlook rather than short-term fluctuations might be the most viable strategy amid the unexpected market fluctuations we are witnessing now.