Why The 15% Correction Happened And Why It’s A Good Thing

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From a high of $69,000 to a low of 58,638, Bitcoin recorded a 15% correction, and Ethereum from a high of 4,868 to a low of 4,108 fell 15.6%.

A number of negative factors led to yesterday’s correction. It is important to stress that volatility is a key factor that drives certain investors to cryptocurrencies, so the short-term correction – especially after a long and for many unthinkable rally is only a healthy market move – that will attract more investors who were waiting to position themselves.

The inflation rate announced in October in the US at 6.2%, the highest since November 1990, creates a sense of panic in the global financial markets. How long will the Fed be able to continue to pretend that inflation is transient – corrective action will need to be taken in a short period of time.

Volatility is a key factor that drives certain investors to cryptocurrencies, so the short-term correction is only a healthy market move – that will attract more investors who were waiting to position themselves. #btc $btc #altcoins #cryptonews

The Factors That Caused The Correction

  • On November 14, the market’s reaction to the successful upgrade of Bitcoin’s Taproot Upgrade was disappointing. There was a strong expectation that this would be a catalyst for a new rally that would catapult the price of $BTC. The lack of directional reaction caused the phenomenon of “buy the rumor, sell the news”.
  • On November 16, China’s National Development and Reform Commission reiterated its firm stance of opposition to the cryptocurrency markets, stressing that the mining of digital currencies is extremely harmful and additional measures will be taken to limit mining. Well, the market is afraid and still reacts to China’s games – it has already been banned – and it is something that should not yet scare the market – but with a lack of direction even this can create a significant corrective decline.
  • Finally, again on November 16, US President Joe Biden signed a bill under which cryptocurrency exchanges must inform tax authorities of any transaction over USD 10,000.

These news titles caused a sharp drop in the cryptocurrency market โ€“ which does not seem to scare investors.

The BTC fell below the $60,000 level but has since risen up again. We expect a market stagnation around this level of $60,000- expecting pace and direction. Instead, we expect greater volatility/volatility in ETH and altcoins.

We still haven’t seen a real bull run for altcoins markets – mainly for micro caps projects.

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