Although the Bitcoin (BTC) price has risen impressively over the past few weeks, it has gone through a significant correction in the last 24 hours, crashing by more than $10,000. With a nearly 20% correction, the king coin crashed from $58,000 to below $48,000.
This setback, which was predicted because of heavy BTC deposits to Gemini, as people deposited 28,000 BTC to Gemini, has also caused a fall in other cryptocurrencies. As a result, there is an increase in Bitcoin’s market dominance.
Usually, market players hope corrections are small and short-lived when they first begin. However, sentiments quickly shift to the negative when the corrections last longer than a short while. Although corrections may be required to keep markets healthy, the sharp rises and falls in the price of cryptocurrencies lend credence to naysayers who believe crypto assets are Ponzi schemes.
What is unsure is whether the market will experience an extended correction or the Bitcoin price will hold above the former compression period. Technically, the period of compression should serve as important support.
In view of this, the key indicator to watch is the 21-week moving average(M.A.), which is supposed to prevent BTC’s price from diving further. Currently, the 21-week MA is at $28,000, and is expected to rise to $32,000-$34,000 in the weeks to come.
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