Bitcoin (BTC) and cryptocurrency exchange Binance analyzed the recent plunge in the digital asset market and assured that such a correction does not necessarily mean that a downward trend has arrived. For the exchange house, it is a usual behavior in which the forces of supply and demand readjust.
Binance explained that during an uptrend, like the one the market is currently experiencing, there can be several corrections. The most recent one was reportedly caused by, among other factors, power outages at Chinese miners and over-stimulation of the market.
“Corrections happen in the cryptocurrency market, but they don’t always lead to bear markets. Several corrections preceded bitcoin’s rise to its last historical high of nearly $64,000 in April 2021,” the exchange detailed in a blog post (in Spanish).
The exchange reiterated that corrections like the one seen last week are usually followed by rallies. If this behavior occurs, the market could resume the bullish run that has lasted for the past year. However, if the corrections continue, then a more prolonged period of decline will have arrived.
As background, Binance cited what happened in 2017 when BTC reached $20,000 a pop. After reaching that milestone, the market’s leading cryptocurrency went through several corrections that eventually turned into a bear market that lasted for two years.
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Bitcoin up or down?
For Willy Woo, a cryptocurrency market analyst, the upward trend in digital assets like bitcoin is intact. Despite the recent correction and subsequent volatility, the researcher believes that BTC is only “heating up,” meaning it is setting itself up for a much bigger rise.
Willy Woo’s main argument is that the number of users interested in bitcoin is increasing more and more, regardless of how it trades on the markets. “BTC users have roughly doubled every year since its inception a dozen years ago,” commented Willy Woo.
A different viewpoint is that of Venezuelan analyst Alberto Cardenas, who recently indicated that the rise in bitcoin’s price was due to extreme leverage. For the trader, this leverage would already be dismantled and BTC would once again have a downward trend that would take it to $20,000.
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First published in Mon Livret.fr, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
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