BTC dips below $11,500 dragging the rest of the market down with it, losing $8 billion in value so can we expect a greater market correction or another opportunity to buy the dip? We are reading more in the bitcoin news today.
Since the start of the year, the total crypto market cap increased by more than 100% and Bitcoin’s year-to-date returns were at over 60%. The leading cryptocurrency by market cap is trading more than triple since the Black Thursday crash at $3,800. The crypto market after that day has been on a strong uptrend on the back of the stimulus money. Inflation fears have prompted the investors to look towards hard assets such as BTC and other cryptocurrencies. Ethereum for example performed well, maybe even better than Bitcoin over the year.
According to the Average Directional Index on the total crypto market cap, the recent uptrend came to an end and the indicator is starting to turn downwards. As BTC dips below $11,500, it indicates a short-term rally being fizzled out and a new one could soon emerge. However, the same indicators on the timeframe suggest that the longer-term uptrend remains intact and is solidifying the ground. This could imply that any corrections could be an ideal chance to stock up on cheaper crypto assets.
Bitcoin charts are showing a similar story with the ADX showing a weaker trend. Altcoins recently outperformed Bitcoin by a wide margin so it’s not a surprise to see the total market cap bullish than ever before. Bitcoin’s breakout above $10,000 was driven by the boom of the Defi coins and the declining dollar as well as the renewed interest in crypto thanks to the inflation. Analysts argue that the next crypto bull run is upcoming and assets such as BTC and ETH will be headed to an extended uptrend and higher valuations.
Most of the analysis is predicted on Bitcoin’s four-year-cycle theory so if an asset follows a similar trajectory it could even hit $325,000 per BTC by the end of 2021. What this means for the rest of the market, we can only guess. We can only wonder whether the crypto market is heading towards another bull run or this is a major rejection back into the bear market.
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