Crypto Already Back on Track After Bitcoin Loses $10,000 over the Weekend
Over 20% correction finally came, however, nowhere near the 30% to 40% of 2017, following Bitcoin’s weekly RSI going to 94.7, higher than 2013’s top.
After months of an uptrend, without taking a breather, Bitcoin finally had a deep pullback that we have been looking for and had almost lost hope for.
This weekend, unlike many others, saw the market taking off profits. From the all-time high of $42,000 on Jan. 8, Bitcoin lost nearly $10,000 with a drop of 23.8% to as low as $32,000. Interestingly, this deep pullback, which looks heinous on the chart, is nowhere near the 30% to 40% pullbacks we saw during the 2017 bull market.
However, this has been the biggest one-day correction since Black Thursday.
Despite the pullback, the funding rate on exchanges, especially Deribit, remained high, signaling the heating market. The rates didn’t calm down until some time later when the market started up-trending again.
Of course, Bitcoin pulled the entire cryptocurrency market down with it that had ETH going back to almost $1,000, a fall of 25.5%. This resulted in wiping out $19 billion from the total cryptocurrency market cap.
Altcoins lost 20% to 30% of their value; however, some even still managed to see some greens like STK (46%), PIVX (26%), ZEN (20%), and surprisingly ZEC (3.40%) too.
For now, the market losses seem to be taking a break and finding their way upwards again. The fundamentals of the largest network, hash rate, and difficulty hit a new peak today.
Such losses are not only to be expected but are healthy after the onslaught of bulls to calm down the market and set a base before going even higher.
As we reported, the funding rates on the derivatives exchanges have been going berserk, not to mention Bitcoin’s weekly RSI that closed the last week at 94.7, the highest since the 2013 top. During the Dec. 2017 top, the weekly RSI was at 90.2.
— Sven Henrich (@NorthmanTrader) January 10, 2021
Interestingly, the initial pullback to $36,000 was scooped up fast, but another leg down had people panic selling that exacerbated this sell-off to an even lower level.
For instance, 180 BTC worth about $6.5 million at the time panic sold on Coinbase and took the price down $1,200 in a second.
Given that Bitcoin and ETH are moving back up and have already recovered over 8%, it points out that people were eager and ready to buy the dips. HXRO Labs noted,
“The market is extremely overbought, but volume continues to rise, and momentum indicators are strong. The PCZ and 20 SMA will meet someday, giving late bulls a target entry.”
As a matter of fact, Bitcoin taking to ranging after this pullback could bode well for altcoins. With Bitcoin dominance at 69%, down from 72.5% on Jan. 2nd, “Altseason2021 battle lines are clear.”