Late stage of a bull market. When will bitcoin correction end?
At the end of February, the bitcoin rate fell to a local minimum of $43K. Cryptocurrency quotes began to decline sharply after updating the historical maximum above $58K. In the last week, the cryptocurrency began to rise in price, rising twice above $ 52 thousand, but could not resist and returned to the downward trend. As of March 5, 12:30 Moscow time, the asset is trading at $ 46.8 thousand, over the past day it has fallen in price by 4%.
The correction will continue, ending in the $38-40K zone. After that, the cryptocurrency will return to growth and renew its historical maximum, experts say. The likely continuation of the decline in asset prices is also indicated by the seasonality factor, since March is historically the worst month for bitcoin.
Continued growth can be indicated by the trend among public companies to buy bitcoin to diversify their income. For them, the key buying triggers were the available cheap liquidity distributed by the Fed, high yields, and the launch of new ETFs and futures.
At the same time, the head of Binance, Changpeng Zhao, said that large investors are using a unique buying model on the crypto exchange. According to Zhao, institutional-level players have only been buying crypto assets for a long time and then withdrawing them from the crypto exchange. The CEO of Binance stressed that most of these investors have come to the site over the past year.
Despite the correction, liquidity has not yet left the market. There are no big risky purchases, but there are also no big profit taking. If they occur, then they find a demand under them and the price does not drop much. For cryptocurrencies, the specialist called a drop in quotations by 30-40% as a strong drawdown.
Bitcoin is clearly in the late stage of a bull market.
While everything is developing “relatively well”, the correction is taking place along with the rest of the risky assets, especially in the US tech sector. At the same time, the flow of positive news about the arrival of institutional investors in Bitcoin continues. Heats up interest in cryptocurrency and hype with non-fungible NFT tokens.
As soon as the local wave of risk-off (when investors withdraw funds from risky assets) ends, we can immediately see a spring upward movement to medium-term goals of $ 75,000”, analysts predict.