- Friday’s sharp drop in cryptocurrency markets may signal the early phase of a new bull market, according to leading traders.
- Bitcoin’s price fell over 10%, dropping below $102,000, after the announcement of a 100% tariff on China by former President Trump.
- More than $19.3 billion in crypto positions were liquidated, surpassing losses seen during previous major market downturns.
- Analysts remain optimistic about Bitcoin’s short-term movement, though some expect a brief cooling-off period before further gains.
- The Crypto Fear & Greed Index moved into “Extreme Fear,” reflecting widespread caution among investors.
On Friday, the cryptocurrency market experienced a significant downturn as Bitcoin’s price fell over 10% to around $102,000 following former President Trump’s announcement of a 100% tariff on goods from China. The sudden price drop sparked discussion among traders and analysts about the future direction of the market.
Liquidations totaled over $19.3 billion, exceeding the previous records set during the COVID-19 crisis and the collapse of the FTX exchange. According to Alex Becker, a crypto trader, this sell-off could represent the early stages of a bull market. Becker stated in a YouTube video that, “selling right now could be the stupidest thing you could ever do.” Samson Mow, founder of Jan3, supported this view on X, writing, “It’s time for Bitcoin’s next leg up.” (See post)
Despite the market turmoil, Bitcoin later reached $125,100, though still short of the $250,000 price targets set by industry leaders like Arthur Hayes and Joe Burnett earlier in the year. Benjamin Cowen, another crypto analyst, told followers on X that he anticipates Bitcoin’s price will, “continue to climb in the short-term” (see statement), after Bitcoin dominance in the crypto market recovered to 60% on Friday.
Economist Timothy Peterson offered a more cautious outlook, suggesting Bitcoin might undergo a three to four-week period of slower growth before resuming its rally. Meanwhile, the broader industry shows signs of uncertainty, as highlighted by the Crypto Fear & Greed Index, which fell to a score of 24, indicating “Extreme Fear” among crypto investors.
The recent market crash, described by Becker as a “massive overreaction,” has reportedly “reset everything” and could change the momentum across the broader crypto sector, which has underperformed compared to Bitcoin’s year-long gains. Market observers continue to watch for signs of stability as the industry processes the impact of the recent liquidation wave and price volatility.
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