Bitcoin finally made a downside correction after being on a bullish run for the better part of this week. This is an expected development for a digital asset that has grown so much in such a short time. However, while some in the market lament this bearish trend, it is important to look at what a correction like this could mean for a digital asset. Because it may be more useful than harm at such times.
Is this patch bad?
For any bullish recovery, there is bound to be a correction. This can be good or bad depending on the circumstances surrounding market movements. This time around, Bitcoin is starting a recovery trend after posting significant gains earlier this week. Now, for the current market, this appears to be more beneficial for a digital asset due to where the price has fallen.
Bitcoin managed to reach as high as $47,000 in the north during its recent rally. This helped solidify the cryptocurrency’s bullish position. However, after building a lot of momentum, there was bound to be a drawback and the result was a drop in value.
These types of corrections during bullseyes are always good. This is because they allow overbought indicators to change to reset their values to become good enough again for investors. This paves the way for more funds to enter the market in the wake of the correction.
BTC support level at $45K | Source: TradingView.com
Of course, there is still The support area under which the digital asset may not fall, and then becomes a problem for the original. As long as Bitcoin can hold above $45,000, the power remains in the hands of the bulls meaning that the cryptocurrency is likely to continue its current upward trajectory. If this is the case, Bitcoin could see a major bounce coming. Most likely during the weekend when there is less liquidity in the market.
Bitcoin needs to be held
In the short term, Bitcoin has no problems recording an uptrend. The main pain point now remains the long-term consolidation of this position and in order to do that, the digital asset has to beat the 100 day simple moving average. It is already trading above this but it remains a small margin. If the bottom of this correction stops above $45,600, this BTC will return to a long-term bullish trend.
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It remains a buyer’s market although how long the latter will be determined by performance over the next week. A proper break above $47,000 will once again pave the way for another massive rally. However, $48,000 will be an uphill battle given the waning momentum.
BTC trading above $45,000 | Source: BTCUSD on TradingView.com
Featured image from FXComfort, chart from TradingView.com