Bitcoin and Altcoins in a Downturn: Understanding the Correction

• After a successful rally that saw Bitcoin (BTC) and a number of top altcoins set a new year high, prices have seemingly stalled.
• The Bureau of Labor Statistics released the latest inflation figures leading to a price dip as crypto investors get increasingly bearish in local supports.

In recent days, the crypto market has taken a hit with prices struggling around local supports. Market leader Bitcoin (BTC) recently topped $37,000 to mark a new year high. Unfortunately, the digital asset has retraced since reaching this high after facing strong resistance. With it, the rest of the market has been falling after a majority of altcoins also set a year high.

At the time of press, BTC has found support at $36,200, marking a nearly 3 percent increase in the last 7 days. Ethereum (ETH), which is the largest altcoin by market cap is trading at a little over $2,000. The global crypto market cap is $1.4T, a 0.57 percent increase over the last day. Investors are cautious following the retracement which suggests that the market still requires further support from the bulls to rally past the local resistances.

According to experts, the recent market rally is fueled by institutional interest in Bitcoin. One of the most anticipated products is a Bitcoin spot ETF with financial giants such as BlackRock filing to offer the product to institutions. It’s predicted that this will attract a huge number of institutions who have long been watching the digital asset but are concerned about its complexity and lack of regulatory clarity. It’s predicted that approving a Bitcoin spot ETF will attract billions of dollars in institutional investment, fueling BTC to a new all-time high.

Following the latest US inflation figures positivity, the stock market has been performing well. Additionally, the Bureau of Labor Statistics released the latest inflation figures. Accordingly, goods and services rose in price by 3.2 percent over the last twelve months – a positive signal. These are positive for the economy but have seemingly hurt the crypto market which acts as a hedge for a failing economy and inflation. But although the economy is showing positive signs, the government military spending and political shift which threatens the dominance of the dollar means the positivity is not certain.

Few experts are convinced that the bullish pattern is over. This is viewed by most as a short break from the news and rumors swirling fast over the last couple of weeks. Although a Bitcoin spot ETF is yet to be approved despite the news circulating a few weeks ago, it is believed to be an imminent eventuality. In addition, the Bitcoin halving is now just a few months ahead. Historically, this has been one of the most bullish events for the digital asset.

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