Crypto Correction Drags Prices Below $90K in Major Downturn
Recent developments in the cryptocurrency market have seen a significant downturn. Bitcoin, the leading cryptocurrency, has fallen below the $90,000 threshold, marking a notable correction. This decline follows a brief period of gains where cryptocurrencies outperformed U.S. stocks.
Current Market Trends
As of now, Bitcoin has dropped 4%, settling under $90,000. Ethereum’s price has also decreased, sliding 6.5% to below $3,000. These changes highlight the volatile nature of the market.
Impact on Crypto-Related Stocks
- Strategy (MSTR) fell over 8%, reaching a one-year low.
- Circle (CRCL) and BitMine (BMNR) experienced similar downward trends.
- Miners such as Bitfarms (BITF) and Hive Digital (HIVE) also saw significant declines.
Investor Sentiment and Market Analysis
Investor sentiment remains cautious, as indicated by the Crypto Fear and Greed Index, which is currently in the “Extreme Fear” zone. Vetle Lunde, head of research at K33, stated that the current correction, which is nearly 30% over 43 days, ranks among the severest corrections since March 2017.
Capital Outflows from ETFs
Steady outflows from exchange-traded funds (ETFs) have exacerbated the downturn. Data shows nearly $2.3 billion has been withdrawn from U.S.-listed spot Bitcoin ETFs over the last five sessions.
Possible Future Outcomes
According to Lunde, the recent price action may lead to a formation of a bottom between $84,000 and $86,000 if the current trend mirrors previous significant corrections. Alternatively, if downward pressure continues, a revisit to April’s low, where MSTR’s average entry was $74,433, may occur.
