On May 1st, Bitcoin (BTC) plummeted to $59,130, marking a two-month low and its first dip to this level since February, when the market sentiment was positive.
Following the breach of monthly support, analysts are now focusing on the next support levels and anticipating further decline in this expected correction.
Normal Market Behavior
Despite the 19.8% drop, industry analysts seem unfazed by the recent pullback, considering it as the fourth 20% correction within the last 12 months. Raoul Pal, the founder of Global Macro Investor, highlighted this observation and emphasized that such corrections are common.
This is the 4th 20% correction in BTC in 12 months…pretty ordinary stuff. pic.twitter.com/YT3gs4jUlG
— Raoul Pal (@RaoulGMI) April 30, 2024
Some analysts suggest that there could be more downside potential before the market resumes an upward trend as historical bull market corrections have involved more significant drops. The possibility of a 30% retracement to $52,000 from the mid-March all-time high remains a concern.
Trader “Cold Blooded Shiller” stated, “In no rush to throw money into the market until $58k sweep + recovery, $52k puke, or $62.5k reclaim.”
Charles Edwards, the founder of Capriole Fund, echoed the sentiment that corrections are a normal part of the cryptocurrency market, emphasizing the need for tolerance for downside fluctuations.
Looking at the broader financial landscape, the Kobeissi Letter noted a decline in various asset classes, attributing this to increasing uncertainty ahead of the Federal Reserve meeting.
This feels like a general move out of risky assets as uncertainty spikes.
Current situation:
1. Stocks are down ahead of more big tech earnings
2. Oil prices are down on fears of higher interest rates
3. Gold prices are down on worries over a stronger Dollar
4. Natural gas prices are down on weak US demand
5. Bond prices are down ahead of the May…
— The Kobeissi Letter (@KobeissiLetter) April 30, 2024
Pressure on Altcoins
Overall cryptocurrency market capitalization has dropped by 6.4% in the past 24 hours, with approximately $135 billion exiting the market, mainly impacting altcoins.
Ethereum faced a 6.6% decline, slipping below $3,000 to $2,940 during Asian trading before a slight recovery.
Other alternative coins such as Solana (SOL), Dogecoin (DOGE), Shiba Inu (SHIB), Avalanche (AVAX), Bitcoin Cash (BCH), and Near Protocol (NEAR) also experienced notable losses.
The negative trend in the market coincides with the news of former Binance CEO Changpeng Zhao receiving a four-month prison sentence.
Image Source: DUSAN ZIDAR / Shutterstock
