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Cryptocurrency News Articles
Bitcoin (BTC) Market Correction May Have Flushed Out Weak Hands, Setting the Stage for a Rebound
Oct 13, 2024 at 10:00 pm
This month, Bitcoin [BTC] has twice tried to break past the $65K resistance, with both attempts followed by sharp pullbacks.
Bitcoin [BTC] has had a rough couple of weeks. After failing to break past the $65K resistance twice, the world’s largest cryptocurrency has seen some sharp pullbacks.
The latest drop drove BTC down to $58K – its lowest in over two weeks. This has raised concerns about a deeper correction. At press time, BTC traded at $62,662.
If a similar pattern holds, Bitcoin may face further downside pressure. However, there’s a silver lining. The sharper pullback may have flushed out weak hands, potentially sparking renewed interest from stronger buyers.
This cleansing effect often leads to fresh accumulation, setting the stage for a rebound.
While Bitcoin has struggled, memecoins like PEPE have seen a resurgence. PEPE rose over 5% in a week. Typically, memecoins thrive during periods of market uncertainty as traders seek high-risk, high-reward opportunities.
But PEPE’s performance may still be tied to Bitcoin’s price action.
BTC is showing short-term potential, but…
Currently, it looks like BTC is heading toward a short-term correction, with longs regaining control in the market.
This scenario sets up an ideal short-squeeze condition, where short sellers are forced to buy back BTC, driving the value of each token higher.
However, this doesn’t guarantee a rebound strong enough to position BTC for a bull run to $70K.
Over the past week, long-term holders have moved less than average, while sellers holding BTC for less than 155 days have started to sell off their holdings, as indicated by the green wig.
In the context of a bull market, increased selling often signals a potential market top. As more investors take profits, concerns grow about a deeper pullback that could push BTC back below $60K.
Conversely, if $62K proves to be a market bottom – with longs dominating, LTHs remaining steady, and others viewing this as a dip to buy – it may signal the start of an accumulation phase.
It’s crucial to monitor these actions closely; any slight divergence in these trends could limit the likelihood of a rebound, which currently seems likely.
PEPE might stay in the green throughout the next week
Historically, memecoins have seen dramatic rallies during Bitcoin corrections as traders seek high-volatility opportunities in a shaky market.
However, they are also highly sensitive to Bitcoin’s broader market direction.
If BTC can hold its current levels and start to rally, PEPE could experience a short-term correction as traders shift focus back to BTC and other high-cap assets.
On the flip side, if Bitcoin continues to falter, PEPE may benefit from another memecoin cycle, potentially pushing it to new range highs.
While many newly launched memecoins have recorded double-digit surges, PEPE might continue to stay in the green as well.
Over the last three days, PEPE surged above $0.000010 but struggled to hold that level. A huge influx of 1.8 trillion PEPE tokens being deposited into exchanges – the highest in three months highlighted the bulls’ struggle to maintain momentum.
This highlights just how volatile memecoins can be. Interestingly, as BTC pulls back, PEPE is again experiencing an increase in net withdrawals, which historically signals a market bottom.
For a successful bull run, consistent net outflows are crucial. If this trend breaks as BTC regains dominance, it could dampen the renewed optimism surrounding PEPE.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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