Bitcoin (Rally Ending Crypto) correction has hit investor sentiment hard, but analysts remain optimistic about digital assets. The recent leverage wipe-out is seen as beneficial, making the market healthier, according to K33 analysts. The upcoming Bitcoin halving is expected to positively impact prices, especially with spot BTC ETFs attracting a broader audience, noted an LMAX Group strategist. Despite potential weaknesses from the stock market, analysts like Noelle Acheson suggest any drop in crypto assets would be short-lived due to other narratives at play.
Over the weekend, crypto markets experienced significant declines, with Bitcoin dropping below $62,000 and altcoins like Solana (SOL), Pepe Coin (PEPE), and Dogwifhat (WIF) suffering 40%-50% setbacks from recent highs. However, there are still several reasons to remain bullish on digital assets.
Upcoming Bitcoin Halving
The upcoming Bitcoin halving, set to reduce the newly issued supply of tokens by half, historically precedes parabolic rallies, even though this time the market might not expect much additional upside momentum. However, with the introduction of spot ETFs listed by traditional finance giants like BlackRock and Fidelity, this Bitcoin Rally Ending halving could bring positive effects on Bitcoin’s price.
Despite recent market turbulence due to macro events such as increasing fears of military escalation and rising bond yields, analysts like Noelle Acheson believe any drop in crypto assets would be temporary. Other ongoing narratives, including store of value, halving, currency hedge, new use cases, and growing adoption, are expected to encourage accumulation at lower levels.
The recent leverage wipe-out, which saw massive liquidation events on derivatives markets, is seen as a positive sign for the market’s health, reducing the likelihood of liquidation cascades. This, combined with Bitcoin holding above $60,000, indicates a robust market signal.
Overall, despite the current market correction, the pullback in BTC’s price is considered normal for bull markets, following previous patterns of 20%-30% corrections before continuing to higher prices. Hedge fund QCP Capital has noted consistent, sizable demand for BTC and ETH calls for longer-term expiries, suggesting that market participants still expect higher prices in the future.
