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Pro traders buy the Bitcoin price dip while retail investors chase altcoins

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Bitcoin (BTC) has been struggling to sustain the $55,000 support level for the past 16 days, or basically since the April 17 record-high $5 billion long contracts liquidation. The rejection that took place after the $64,900 all-time high had a devastating impact on the sentiment of retail traders, as measured by the perpetual futures funding rate significant drop.

However, despite Bitcoin’s recent underperformance and today’s 6.5% drop, pro traders have been buying the dip for the past 24 hours. These whales and arbitrage desk movements are reflected in the OKEx futures long-to-short ratio, as well as Bitfinex’s margin lending markets. As this buying occurs, retail traders are mainly quiet, which is reflected in the neutral perpetual funding rate.

USDT-margined perpetual futures 8-hour funding rate. Source: Bybt

As depicted above, the perpetual futures (inverse swaps) 8-hour funding rate has been below 0.05% for the past couple of weeks. For the end-of-month contracts, prices vastly differ from regular spot exchanges, reflecting the imbalance from longs and shorts leverage.

This discrepancy is why retail traders tend to prefer perpetual futures, albeit with the varying carry cost caused by the funding rate changes.

The current 8-hour fee is equivalent to a 1% weekly rate, signaling a slight imbalance on longs. However, this level is well below the 0.10% and higher rates seen in early April. This data is clear evidence that retail traders aren’t comfortable adding Bitcoin long positions despite the 9% correction in two days.

On the other hand, the top traders’ long-to-short indicator reached its highest level in 30 days, signaling buying activity from whales and arbitrage desks. This indicator is calculated by analyzing the client’s consolidated position on the spot, perpetual and futures contracts. As a result, it gives a clearer view of whether professional traders are leaning bullish or bearish.

OKEx top traders long-to-short ratio. Source: Bybt

As shown above, the current OKEx futures long-to-short ratio currently favors longs by 94%. This buying activity was initiated in the early hours of May 4, as Bitcoin broke below $55,000. More importantly, it signals even more confidence than April 14, when BTC hiked to its $64,900 all-time high.

However, to confirm whether this movement is widespread, one should also evaluate margin markets. For example, the leading exchange (Bitfinex) holds over $1.8 billion worth of leveraged Bitcoin positions.

BTC price (orange, left) vs. Bitfinex long-to-short margin ratio (blue, right). Source: TradingView

Bitfinex shows spectacular growth in the BTC margin markets with longs over 50x the amount borrowed by shorts. These levels are unprecedented in the exchange’s history and confirm the data from OKEx’s futures markets.

There’s no doubt that professional traders are ultra-bullish despite today’s Bitcoin dip. As for the lack of appetite from retail traders, their focus seems to be currently on altcoins.

Currently, 18 of the top 50 altcoins have rallied 45% or higher in the past 30 days.

The question is, can the altcoin rally continue if BTC fails to produce a new all-time high over the next couple of weeks?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Pro traders buy the Bitcoin price dip while retail investors chase altcoins

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Waves, Celo, and Injective Protocol (INJ) breakout as DeFi reawakens

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Bitcoin (BTC) extended its relief rally on Tuesday and reclaimed a market capitalization above $1 trillion.

While many traders panicked during Bitcoin’s recent fall below $47,000, fund manager Dan Tapiero said that he spotted a rare TD sequential buy signal during the low. The last time this signal was seen was in March 2020 when Bitcoin price traded near $3,600. Tapiero believes Bitcoin remains on target to reach $100,000 this year.

However, even after the recent rise above $55,000, Bitcoin’s market dominance continues to lag at 49.5%, according to CoinMarketCap data. This shows that crypto investors are focusing on altcoins, with several hitting new all-time highs.

Crypto market data daily view. Source: Coin360

The altcoin season is not entirely driven by retail investors. A recent report by crypto investment advisory firm Two Prime Digital Assets highlights that the eightyfold growth in Ether (ETH) options open interest, from $50 million to $4 billion in a year, points toward hedging by institutional money managers to protect their “net long portfolios against outsized volatility events.” Even the Ether futures market has increased by 20, cementing the involvement of institutional investors.

Keeping the focus on altcoins, let’s study the fundamentals and technicals of three tokens that have done well in the past few days.

WAVES/USDT

Many crypto enthusiasts are interested in investing in digital assets, but they do not have the required trading experience. Therefore, they miss several opportunities or end up leaving money on the table. Others work full time and, therefore, cannot devote time to trading. For such investors, a well-devised algorithmic trading product could be suitable, but it comes with its own risk.

Waves launched a new algorithmic trading investment product called “Lambo Investments” on April 15. The protocol’s exchange platform announced it would give away a Lamborghini Huracan to a random investor in the product, which could have lured traders.

Along with decentralized finance (DeFi) and algorithmic trading, Waves has also made a splash in the nonfungible tokens (NFTs) sector. While the overall NFT craze has subsided, select investors continue to focus on them. The first Waves Duck NFT, called “Perfection,” was sold for 1 million Neutrino USD (USDN) — an algorithmic stablecoin pegged to the U.S. dollar and collateralized by the native Waves token, WAVES — on Sign Art on April 12.

To further boost growth, Waves founder and CEO Sasha Ivanov recently laid out ambitious plans to reach $10 billion in total value locked by October and average 10 million daily transactions by February 2022. Traders are likely to keep a close watch on the developments, which could decide the level of investors’ interest in the project.

WAVES rallied from an intraday low of $11.09 on April 23 to an all-time high of $21.09 on April 27, a 90% gain in five days. However, the long wick on April 27’s candlestick suggests profit-booking at higher levels.

WAVES/USDT daily chart. Source: TradingView

The WAVES/USDT pair could give back some of its gains and drop to the $16–$17 zone. If the bulls can flip this zone into support, it will suggest that sentiment remains positive and traders are accumulating on dips.

The 20-day exponential moving average (EMA) of $14.64 has started to rise, and the relative strength index (RSI) is in the positive zone, indicating the path of least resistance is to the upside.

A strong bounce off the support zone could result in a retest of $21.09. If buyers can drive the price above this resistance, the pair could resume its uptrend and reach $25.

This bullish view will be invalidated if the bears sink the price below the 20-day EMA. Such a move could pull the price down to the 50-day simple moving average (SMA) of $12.65.

INJ/USDT

Injective Protocol recently announced that it secured $10 million in funding from several investors, including Pantera Capital and billionaire Mark Cuban, for its DeFi protocol, which is alleged to have the best of both centralized and decentralized exchanges. Injective’s aim is to build a decentralized competitor to Robinhood.

On the development front, the protocol announced on April 15 that it had achieved “Trezor support for the EIP-712 signature standard,” which will allow Trezor users to access Ethereum-based applications.

Injective has been partnering with several blockchains to improve the experience for its users. Thus far in April, it has announced collaborations with API3, Harmony, Staked, Litentry, Persistence, Big Data Protocol and Klaytn.

Additionally, periodic token drops in Equinox Staking may have been an added attraction to the investors.

Injective’s native token, INJ, rose from $10.91 on April 20 to an all-time high at $21.55 on April 22, recording a 97% increase in three days. The bulls could not sustain even higher levels on April 20, as seen from the long wick on the candlestick.

INJ/USDT daily chart. Source: TradingView

This encouraged the bears, who tried to trap the bulls and start a correction. However, the buyers purchased the dip to the 50-day SMA ($13.40) on April 23 and defended the 20-day EMA ($15.26) on April 23. This suggests that the sentiment remains positive and the bulls are accumulating on dips.

The buying momentum picked up on April 26, and the bulls cleared the first hurdle at $18.15. If the bulls can sustain the price above $18.15, the INJ/USDT pair could rise to $21.55. A break above this resistance could start the next leg of an up-move that may reach $26.44.

Contrary to this assumption, if the bears pull the price below $18.15, a drop to the 20-day EMA is likely. A break below this support would signal that the momentum has weakened, and the pair may drop to the 50-day SMA.

CELO/USDT

CELO was previously featured on Cointelegraph on Jan. 26 when its price was $3.24. From there, the token rallied to an all-time high of $7.23 on April 21, a 123% rally in just under three months.

Celo announced on April 20 that Deutsche Telekom made a “significant purchase” of CELO tokens through its strategic investment fund, Telekom Innovation Pool. Although the size of the investment was not disclosed, it is likely to be a major sentiment booster for the token.

A new gas-efficient bridging standard dubbed “Optics,” connecting Celo to Ethereum, was announced on April 21. This is the first step toward building an open, connected blockchain ecosystem, which eventually will include Cosmos, Polkadot and others.

The payments platform announced the launch of the stablecoin Celo Euro (cEUR) on the mainnet on April 22. This is the second stablecoin, after Celo Dollar (cUSD) — which was launched on Celo in June 2020. This increases the user base for Celo users who want to send or receive money from relatives and friends.

CELO has been consolidating between $3.50 and $5.76 for the past few days. The bears pushed the price below the support of the range on March 25, but the bulls reclaimed the level on March 26, indicating buying at lower levels.

CELO/USDT daily chart. Source: TradingView

The sharp rally on April 20 and 21 propelled the price above the overhead resistance of the range, but the bulls have not been able to consolidate their advantage. The bears pulled the price back into the range on April 22.

Although the CELO/USDT pair broke below the 20-day EMA ($5.01) on April 23, the bulls purchased the dip to the 50-day SMA ($4.39). The buying momentum picked up again, and the bulls cleared the $5.76 hurdle on April 25 but could not sustain the breakout.

The Doji candlestick pattern on April 26 and the inside day candlestick pattern on April 27 suggest uncertainty among the bulls and the bears. If the bulls sustain the price above $5.76, a retest of $7.23 may be in the cards. A breakout of this resistance could result in a rally to $8.02.

Conversely, if the bears sink the price below the 20-day EMA, it will suggest that the pair could remain range-bound for a few more days.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.

Waves, Celo, and Injective Protocol (INJ) breakout as DeFi reawakens

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Bitcoin Cash Price Prediction: BCH/USD Now Gets Northbound Pushes from the Dip of Price Correction

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BCH Price Prediction – April 27
The BCH/USD market valuation has begun to get some pushes from a low support line of $700 during the recent price downward correctional moves.

BCH/USD Market
Key Levels:
Resistance levels: $1,000, $1,200, $1,300
Support levels: $700, $600, $500

BCH/USD – Daily Chart
Taking a deep look at the BCH/USD daily market chart, it shows that most of the time that a downward move takes up space, price uses to find a support level around its smaller SMA trend-line. Though, at times a short-lived breakdown of it as well plays out in the process. The 50-day SMA indicator is yet underneath the 14-day SMA trend-line with the bullish trend-line drawn closely to face an upward direction to now indicate immediate support at the $800 line. The Stochastic Oscillators are dipped in the oversold region trying to open the hairs towards the north. That signifies the possible return of an uptrend in the near time.

Will BCH/USD move backward to revisit its previous $700 low value?
The BCH/USD market point of $700 has come to be the vital line in the determination of ongoing upswing. And, yet, the current upside trading position has not been taken far away from the trading zone. However, strong indications are signaling the potential of seeing more movements to the north in the near trading sessions.

It would be more technically accepted that bears should stay away from placing any counter order against the already established uptrend. Therefore, it would make a whole lot of sense to wait for rejection possibly in between $1,100 and $1,200 levels to occur at a later session to be able to reconsider the sell order entry. However, if price holds strong between those zones, it could lead to a consolidation that may eventually nullify the bears’ position further.

BCH/BTC Price Analysis
In comparison, BTC is still struggling retard the appreciation moving spree of BCH until the present time of writing. In attestation to that, a series of variant higher lows has surfaced a bit over the smaller SMA trend-line. The 50-day SMA indicator is underneath the 14-day SMA. The Stochastic Oscillators have moved down into the oversold region to show the weakness of the counter trading tool in its wake to resist the power of the base crypto. As a result, BCH will still dominate the space against BTC for a while.

Bitcoin Cash Price Prediction: BCH/USD Now Gets Northbound Pushes from the Dip of Price Correction

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XRP Price Prediction: XRP/USD Now Features a Strong Pull-Up from Around the Support Level of $1

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XRP Price Prediction – April 26
There has been a rate of increase in the market valuation of XRP/USD as is pushing on a higher note to the north direction from a low trading area of around $1.

XRPUSD Market
Key Levels:
Resistance levels: $1.50, $1.70, $1.90
Support levels: $0.90, $0.70, $0.50

XRP/USD – Daily Chart
A critical support line has drawn near below the smaller SMA trend-line to mark a starting point of return of the current ongoing beefing bullish candlestick in the market. The smaller SMA has breached to the north as pushes get on an increasing rate through some resistances. The 50-day SMA indicator is still located around the support value of $0.80 to showcase the most probable deadlier extent to any ugly untimely event that can occur to depress the XRP/USD uptrend afterward. The Stochastic Oscillators’ hairs are conjoined in the oversold region. But, they now appear to open the hairs to potentially signify a return of an upswing in this market.

Will the XRP/USD $1 critical support line now serves as a good base for more ups?
About the downside, the XRP/USD trading chart depicts a tougher situation for bears to sustainably stage a come-back in the near sessions. As result, it now calls for a pause in their consideration for a while as long as the current gets no rejection at a higher trading zone. A pit stop may be experienced suddenly at a resistance line. But, that may not eventually portend the real sell entry signal afterward.

About the downside, the trading chart depicts a tougher situation for bears to sustainably stage a come-back in the near sessions. As result, it now calls for a pause in their consideration for a while as long as the current gets no rejection at a higher trading zone. A pit stop may be experienced suddenly at a resistance line. But, that may not eventually portend the real sell entry signal afterward.

XRP/BTC Price Analysis
On the matter of comparative purchasing status in the field of cryptos trading between XRP and BTC, the chart still reveals that the trend is in control of the base instrument as paired with its counter trading tool. The XRP market’s value is now reversing after it moved in correction down to touch the smaller SMA. The 50-day SMA indicator is located underneath the 14-day SMA trend-line. The Stochastic Oscillators are in the oversold region with conjoined hairs to now attempt to open it towards the north. That gives a signal that the base trading is on a higher probability of getting to push against the counter crypto’s purchasing power.

XRP Price Prediction: XRP/USD Now Features a Strong Pull-Up from Around the Support Level of $1

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Top 5 cryptocurrencies to watch this week: BTC, ETH, BNB, XMR, CAKE

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Corrections in a bull phase are usually a bullish sign as they reduce the frothy excitement and allow stronger hands to enter the markets. However, the recent correction in Bitcoin (BTC) from its all-time high at $64,849.27 does not seem to have scared novice traders. 

Data from DappRadar shows that decentralized exchange volumes have picked up in the last week as traders may have exited profitable Bitcoin positions to buy altcoins at their current rock bottom prices.

Another sign of interest in altcoins is the sustained high volumes in Dogecoin (DOGE), which remains the fourth most traded cryptocurrency by volume, behind Bitcoin, Ether (ETH), and XRP, according to data from CoinMarketCap.

Crypto market data daily view. Source: Coin360

The recent fall in Bitcoin witnessed selling from the small-to-medium sized whales, who dumped $100,000 to $1 million worth of Bitcoin on the exchanges. However, a positive sign is that the larger-sized whales have continued to accumulate during this period.

While the long-term bullish story remains intact, the near term could see some more downside. Generally, a correction does not end until the retail crowd throws in the towel and a state of fear grips the markets.

In such an uncertain atmosphere, let’s look at the top-5 cryptocurrencies that are likely to outperform the other major cryptocurrencies in the short term.

BTC/USDT

The bulls are trying hard to push the price back above the psychological level of $50,000 but are facing stiff resistance from the bears on every minor rise. This shows that the bears are trying to hold on to their advantage and extend the decline to the next critical support at $43,006.

BTC/USDT daily chart. Source: TradingView

The 20-day exponential moving average ($55,671) is sloping down and the relative strength index (RSI) is close to the oversold territory, suggesting the bears have the upper hand.

The BTC/USDT pair had formed an inside day candlestick pattern on April 24 and today, indicating indecision among the bulls and the bears. If the uncertainty resolves to the downside, the selling could intensify, opening the gates for a decline to $43,006.

On the other hand, if the bulls can push the price above $52,129, the pair could witness a relief rally that is likely to face resistance at the 20-day EMA. If the price turns down from this resistance, the possibility of a break below $47.459 increases.

This negative view will invalidate if the bulls push and sustain the price above the 50-day simple moving average ($56,870).

BTC/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the bears have been selling on relief rallies to the 20-EMA. With both moving averages sloping down and the RSI trading in the negative zone, the advantage is with the bears.

If the bears sink the price below $48,664.67, the pair could drop to $47,459. A break below this support could resume the down move.

Conversely, a break above the 20-EMA will be the first sign that the selling has dried up and the bulls have a chance to extend the relief rally to the 50-SMA.

ETH/USDT

The bulls have once again defended the 20-day EMA ($2,235), indicating the trend remains strong and the buyers are accumulating on dips. Ether will now try to rally to the $2,545 to $2,645 overhead resistance zone.

ETH/USDT daily chart. Source: TradingView

A breakout of the overhead zone could signal the start of the next leg of the uptrend that may extend to $2,745 and then $3,000. The gradually rising moving averages and the RSI above 57 suggest the path of least resistance is to the upside.

Contrary to this assumption, if the price turns down from the overhead resistance, the bears will again try to sink the ETH/USDT pair below the moving averages. If they succeed, the pair may start a deeper correction to $1,542.

ETH/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the pair has formed a head and shoulders pattern, which will complete on a break and close below the neckline. Such a move could pull the price down to the pattern target at $1,600.

On the other hand, if the bulls can push the price above $2,375, the pair could retest the all-time high at $2,645. Such a move will invalidate the pattern and the pair is likely to pick up momentum on a break above $2,645.

BNB/USDT

Binance Coin (BNB) is currently consolidating in an uptrend. The bulls are buying the dips to the $480 support while the bears are defending the $600 to $638.57 overhead resistance zone. A range-bound action after a strong uptrend shows that traders are not hurrying to book profits.

BNB/USDT daily chart. Source: TradingView

Both moving averages are sloping up and the RSI above 56 suggests that the bulls have the upper hand. If the buyers can push the price above $530, the BNB/USDT pair could start its journey to the resistance of the range at $600. The bears are again likely to mount a stiff resistance between $600 and $638.57.

If the price turns down from this zone, the range-bound action may continue for a few more days. On the contrary, if the bulls push the price above $638.57, the pair could start its journey to $720 and then $832.

This positive view will invalidate if the bears sink and sustain the price below $480. If that happens, the selling may intensify and the pair may drop to the 50-day SMA ($368).

BNB/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the price is stuck inside a large symmetrical triangle. Although the price rebounded off the support line of the triangle, the bears are attempting to stall the relief rally at the moving averages.

If that happens and the price turns down from the current level, the bears will sense an opportunity and try to sink the price below the triangle. If they succeed, the pair could start a deeper correction to $348.

Alternatively, if the bulls push the price above the moving averages, the pair could rise to the resistance line of the triangle. A breakout of the triangle may signal the resumption of the uptrend.

XMR/USDT

Monero (XMR) is in a strong uptrend and repeated attempts by the bears to start a correction have failed as the bulls have aggressively bought the dips close to the $288.60 support.

XMR/USDT daily chart. Source: TradingView

The bulls have successfully defended the 20-day EMA ($335) and both moving averages are sloping up, suggesting the buyers have the upper hand. However, the RSI is showing the first signs of a negative divergence, indicating the momentum may be weakening.

If the price turns down from the current level and breaks below the 20-day EMA, it will suggest the possible start of a correction to $288.60. On the other hand, if the bulls push the price above $424.55, the XMR/USDT pair could rally to $498.

XMR/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the volatility has picked up in the past few days. The bears have repeatedly broken the 50-SMA but the bulls have aggressively purchased the dip and pushed the price back above the 20-EMA.

If the pair rebounds off the current level and rises above $405.40, a retest of $424.55 is possible. A breakout of this resistance could start the next leg of the uptrend. Conversely, if the bears sink the price below the moving averages, a drop to $288.60 is likely.

CAKE/USDT

PancakeSwap (CAKE) had been facing stiff resistance near the $28 level for the past few days. The bears tried to sink the price below the 20-day EMA ($24) on April 23 but the bulls aggressively purchased the dip, suggesting the sentiment remains positive.

CAKE/USDT daily chart. Source: TradingView

Momentum picked up in the past two days and the CAKE/USDT pair has broken out to a new all-time high today. The upsloping moving averages and the RSI near the overbought zone suggest the path of least resistance is to the upside.

If the bulls sustain the price above $30, the pair could rally to $34.50. This bullish view will invalidate if the bears sink and sustain the price below the 20-day EMA. Such a move will be a significant event as the price has not sustained below the 20-day EMA since March 24.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for CAKE on April 23, just as the rally was getting started.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. CAKE price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for CAKE flipped green on April 23 when the price was $25.24.

From there, the VORTECS™ Score consistently remained in the green and CAKE rallied to a high at $31.12 on April 25, recording a gain of 23% in about two days.

CAKE/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the formation of an inverse head and shoulders pattern. This bullish setup has a pattern target at $34.70. The 20-EMA has started to turn up and the RSI has risen above 65, indicating the bulls have the upper hand.

In case of a correction, the bulls will try to flip the neckline of the pattern into support. If they do that, the uptrend could resume. Conversely, a break below $27.50 may tilt the advantage in favor of the bears, signaling selling at higher levels

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Top 5 cryptocurrencies to watch this week: BTC, ETH, BNB, XMR, CAKE

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Pros say Bitcoin’s ‘very healthy’ correction ‘builds ground for more stable growth’

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Bitcoin and the wider cryptocurrency market took a beating in the late hours of April 22 and intense selling saw (BTC) price dip below $48,000 in a move that came as a relief to quant analysts like PlanB who were worried that the price growth was showing signs of being inorganic. 

A variety of factors have been identified as being the cause of the drop in price, including an overcrowded futures market and heavy selling activity from small to medium-size whales. Aside from the activity of whales in the crypto market, the most impactful development was the Biden administration’s proposal to raise the capital gains tax on individuals making more than $1 million per year.

Data from Cointelegraph Markets and TradingView shows that a heavy wave of selling led to a break below the $50,000 support level for Bitcoin during the early trading hours on April 23, dropping the price to a low of $47,500 before a few courageous buyers arrived to lift it back above $49,000.

BTC/USDT 4-hour chart. Source: TradingView

The breakdown below $50,000 marks a 25% drawdown from the recent all-time high and now has Bitcoin trading at levels last seen in early March.

Bitcoin inflows to exchanges preceeded the downturn

When asked about last night’s price action, Micah Spruill, the managing partner and chief investment officer at S2F Capital indicated that the selloff “appears to be an attempt to pin the price below the key $50,000 level where a significant number of put options would expire in the money.”

Spruill noted that “bearish net inflows of BTC transfers to exchanges” was the likely catalyst that “drove us down to the next level of on-chain support around $47,500,” and also highlighted the fact that “most of the coins moved on-chain during this most recent selloff were recently acquired coins and not long term holder coins.”

Net transfer of Bitcoin to/from exchanges. Source: Glassnode, S2F Capital

According to Élie Le Rest, a partner at digital asset management firm ExoAlpha, being able to hold the current price level “would confirm the accumulation pattern by institutional investors at or below $50,000, leaving room to grow for Bitcoin in the coming weeks/months.”

If the price should fall further, Le Rest identified $43,000 as the next strong support level and he highlighted the fact that altcoins really began to “flourish” the last time BTC traded in this range in February.

Le Rest said that “getting back to this level may trigger a strong downside for the altcoin market as they would have lost all of their recent gains,” potentially leading to a rise in Bitcoin dominance back above 60%.

Le Rest said:

“Either way, this kind of market pullback is very healthy as it contributes to deleveraging market participants and builds ground for a more stable growth.”

Traders rush to the exits

To help better understand the rapid selloff in the price of Bitcoin, Jarvis Labs co-founder Ben Lilly offered an analogy that alluded to traders acting like passengers on a boat to help describe what happened as a “spontaneous synchronization.”

Lilly said:

“When a boat starts to tip, a few people lean first. The more it leans, the more people also lean. Then bam, it tips…”

Lilly pointed to several opportunities that traders used to make money off this downturn including “selling the altcoin euphoria” as well as profiting from the futures carry trade. He also highlighted the fact that capital was being used to short, not to buy in these instances.

As an indication of how rapidly the market sold off and the degree to which it caught even institutional traders by surprise, Whalemap, an on-chain analytics firm, posted the following tweet highlighting the significance of the $55,000 level.

As for what analysts think about buying BTC below $50,000, Whalemap posted the following chart and said: 

“Hourly moving losses are higher than profits. Historically that was a good buying opportunity.”

Bitcoin moving profits and losses (MPL). Source: Whalemap

The market now anxiously awaits the next major move in Bitcoin price to help determine if this is merely an overdue correction that will lead to a continuation of the bull market or the opening salvo of the next bear market cycle.

Altcoin prices collapse

Bitcoin’s drawdown hit the altcoin market especially hard, resulting in double-digit losses for a majority of the top 100 tokens.

Daily cryptocurrency market performance. Source: Coin360

Ether (ETH), the top altcoin by market cap, was pummeled and trades more than 12% away from its April 22 all-time high of $2,640. Meanwhile, XRP and DOGE have been the hardest hit tokens in the top 10 with their prices falling more than 20%.

Three notable exceptions to the current sell-off include Compound (COMP), Waves (WAVES) and Helium (HNT), which managed to overcome the selling by posting gains of 13%, 9% and 8% at the time of writing.

The overall cryptocurrency market cap now stands at $1.862 trillion and Bitcoin’s dominance rate is 50.7%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Pros say Bitcoin’s ‘very healthy’ correction ‘builds ground for more stable growth’

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