Bitcoin (BTC) Price Drops 12.5% from $3.14 Trillion to $2.75 Trillion

In the first three days of this week, the total crypto market dropped by nearly 12.5% from $3.14 trillion to $2.75 trillion.

The total crypto market cap has seen a slight recovery of 2.72% in the past 24 hours. At press time, the market cap stands at $2.83 trillion.

As part of the recovery, Bitcoin has rebounded by 3.29% in the past 24 hours. At press time, BTC is trading at $86,833.

Could this recovery signal the bottom of the crypto market crash? Or is a steeper correction on the horizon?

Crypto Quant’s CEO Warns: Panic Sellers Are Noobs

According to Ki Young Ju, the founder and CEO of Crypto Quant, the short-term pullback in the crypto market is extremely normal.

The short-term pullback in the crypto market is extremely normal. A 30% correction in a #Bitcoin bull cycle is common based on the past bull performances. In the 2021 bull market, before hitting a new all-time high, the BTC price dropped nearly 53%.

— Ki Young Ju (@ki_young_ju) August 28, 2024

The analyst adds that buying high and selling low is the worst investment strategy.

The analyst, however, predicts that the Bitcoin price could correct further to $77,000.

As per his tweet, the estimated pullback was from $110,000 to $77,000.

There's Always More Room For Correction

In an X post, Ali Martinez, a crypto analyst, has highlighted the potential reversal chances in Bitcoin. The analyst shares Bitcoin on-chain trader realized profit and loss margin for a reversal prediction.

Since 2022, the buying opportunities have occurred when the trader realized the loss margin hits -12%. Currently, it is at -8.25%, which signals more room for a pullback before a bullish turnaround.

Whales and Shark Pump The Bearish Trend

Based on the recent tweet by Santiment, more than 10 Bitcoin wallets have collectively dumped 6,813 BTC in the past week. This correlates with the recent price fall of nearly 20%.

Over the long term, the Bitcoin price is driven by the whale and shark’s behavior. Specifically, the wallets that contain more than 10 Bitcoin.

Due to this massive dump by key stakeholders, Bitcoin is likely to experience a steeper correction ahead. As per Santiment, this is the largest drop from whales and sharks collectively since last July.

Furthermore, the increased optimism in the crypto market of a bullish comeback by retail traders has generally led to a prolonged correction. This is based on the recent Santiment post, which highlights the social media mentions of buy vs. sell calls.

Traders believing in a quick rally often see the price correcting back down. This has happened consistently over the past three months, where the retail trader sentiment has been completely opposite to the upcoming price trend in Bitcoin.

Will Crypto Market Crash Plunge Bitcoin to $80k?

As per the daily chart, the BTC price trend reveals a breakdown of a local support trendline. This has breached the S1 pivot support level at $91,265.

Bitcoin Crypto Price Chart

Currently, the lower price rejection in the previous intraday candle has driven a short-term recovery to $86,000 levels. The fresh green candle, after four consecutive bearish candles, forms a potential bullish-harami pattern.

However, if the BTC price finds closing under the $84,000 mark, the downtrend is expected to continue to the S2 support level at $80,000. On the bullish front, the immediate resistance for Bitcoin remains the $90,000 psychological resistance, followed by the S1 support-turned-resistance level at $91,265.

Hence, based on the recent posts by Santiment and a few analysts, the short-term recovery in Bitcoin comes as a short relief and could witness a steeper correction. Based on price analysis, this puts the short-term price target for Bitcoin at $80,000.

Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.

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