Bitcoin sold off heavily on Monday morning, dropping from the latest record high of $58,367 established over the weekend to lows of $48K.
The sudden spike lower saw the cryptocurrency shed nearly $10,000 off its gains. BTCUSD has since managed to rebound to the $53K level after it located some support in the $50,000 zone.
BTCUSD Chart by TradingView
Bitcoin’s swift loss of altitude coincided with bearish comments from the U.S. Treasury Secretary Janet Yellen.
The newly appointed official described BTC as a highly speculative asset that is extremely inefficient for transactions. She went on to draw attention to the “staggering” electric consumption used to mine the coin.
Today’s sharp slide in price is the largest one-day drop since Feb 10. One analyst recently forecasted an imminent correction, pointing to analytics tools that showed the BTC rally was overstretched.
Simon Peters, an analyst at eToro, noted that a healthy cooling off of the BTC market was overdue.
“Technical indicators such as the RSI and Stochastics across numerous chart timeframes are indicating that the crypto asset is overbought, implying that we could soon see a retracement,” he rightly predicted.
Is the Bitcoin Bull Run Over?
According to crypto trader and analyst Michaël van de Poppe, today’s sudden drop in BTC prices doesn’t point to a bear market. He explained that the market was simply witnessing a healthy reset that was organic for a continued bull run.
Sentiment surrounding the top cryptocurrency remains bullish on growing institutional adoption against the risk of mounting global inflation and fiat depreciation.
That said, the bitcoin price pullback could extend further before the parabolic rally toward $60K resumes. This sentiment was shared by David Lifchitz, CIO of quantitative trading startup ExoAlpha.
“A 15% correction could happen, taking some steam out of the hot market, before reaching new highs,” Lifchitz told CoinDesk.
Joel Kruger, a currency strategist at LMAX Digital, agreed with the notion of a further bitcoin pullback, predicting that prices could soon fall to the support near $42,000.
The possible magnitude of any looming correction isn’t apparent, but crypto enthusiasts remain optimistic that BTC will soon go on to achieve fresh highs above $60K.
XRP Price Rallies 10%
Ripple (XRP) started a fresh increase above $0.5500 on Monday and surmounted several resistance levels to hit highs above $0.5900.
This uptick saw the embattled altcoin outperform BTC and ETH with gains of nearly 10% over the last 24 hours. XRP looks well primed to gain bullish momentum in the coming sessions and continue higher towards $0.6500.