The euphoria was extinguished in the cryptocurrency market on January 11, as prices for most cryptocurrencies fell more than 20% due to the sharp drop in the price of bitcoins.

After falling below the $ 40,000 support level on Jan. 10, Bitcoin (BTC) increased selling pressure overnight and pushed the higher cryptocurrency price to $ 30,229 before reaching weak support.

The rapid fall in prices resulted in the liquidation of more than $ 2.7 billion in futures contracts, and the high candles on the Bitcoin price chart show that liquidation strokes occurred quickly as the price fell from $ 41,000 to $ 32,229.

Dallas Mavericks owner Mark Cuban used the market downturn as an impossible opportunity to assume that the cryptocurrency market is identical to the Internet stock bubble since the 1990s.

“Looking at cryptocurrency trading is as cool as an Internet bubble,” Cuban said, but added that Bitcoin, Ether and “a few others” are likely to follow the path of Amazon and eBay and continue to increase their rankings.

Those with a bit of skin in the game, such as Celsius boss Alex Mashinsky, view the recent decline as a healthy price correction, and Mashinsky suggested that there is a possibility that BTC will drop to $ 16,000 before resuming the bullshit.

Traditional Markets Feel Pressure
The traditional financial sector also came under pressure on Monday, as the political situation in the United States continues to create tension and uncertainty over the future of the country and the economy.

The S&P 500, Dow and NASDAQ ended the day in the red, 0.66%, 0.29% and 1.55%, respectively, as tech stocks and FAANG hit their lowest levels since November 26.

Analysts say the market was on the verge of a correction
Almost every time the price of BTC drops by thousands of dollars, bears, judges, and nocoinzer traders from the void seem to be calling for Bitcoin to be killed.

Given that the price of bitcoin rose from $ 17,586 on December 11 to $ 41,950 in less than a month, David Lifshitz, CIO at ExoAlpha, sees the decline as “a healthy fix for smart businesses that buy 20,000 bitcoins.” Dollars in transit up to $ 30,000. ”

Lifshitz told Cointelegraph:

“One of the warning signs was not that the price of bitcoin had gone up, but the speed, that is, the speed with which it was moving. From mid-December to the end of December 2020, the average daily Bitcoin withdrawal capacity doubled to 8.1%, and again nearly doubled from January 1, 2021 to 15.3%. The larger the capacity, the more exchanges occurred during the day between buyers and sellers. This is a healthy correction despite correcting overgrowth in the past 10 days. so Bitcoin can build a new base for about $ 50,000 or more. ”
You can also find clues about the driving force behind the recent price movement by analyzing new patterns on social media.

According to Joshua Frank, CEO and founder of TheTie, a social analytics platform for alternative data, the absence of Bitcoin Twitter in December 2020 indicates that only a handful of large investors have driven prices up.

In a special comment to Cointelegraph, Frank said:

On January 3, the 24-hour volume of tweets about bitcoin and cryptocurrencies hit an all-time high. Interest in retail has persisted throughout the second week of January, and the average monthly volume of Bitcoin talk on Twitter is now at an all-time high in January. Unsurprisingly, this surge in Twitter activity coincides with a local peak in Bitcoin. ”

BTC / USD daily chart. Source: Coin360
The price of ETH was hit hard by the economic downturn today as it fell to $ 914 before finding support. At the time of writing, ETH is down 16.33% and is trading at $ 1,033. Among the top 50 cryptocurrency projects was Neo (NEO), the only token currently traded in green, up 1.5% and trading at $ 22.52.

The total market value of the cryptocurrency is now $ 847 billion, and the dominance rate of Bitcoin is 68.9%.

Source: CoinTelegraph