Microstrategy bought, Tesla bought, and we rallied. ETH fees were high, funding was high, longs go squeezed, NASDAQ went down, the yield curve went up, and we crashed.
A correction was bound to come, and it looks like it came to not only crypto but to tech in general.
With that said, despite the biggest red candle in Bitcoin history, the current drawdown is not uncommon for crypto in terms of raw percentage points. Nor is the trend too compromised in terms of indicators like simple moving averages as you can see in the ETH&BTC composite chart above.
The question now becomes how much correction will we see, will tech and crypto go bear while people FOMO into 30-year bonds and rotation plays, or is this a healthy correction soon to be followed by an epic run.
Signs are all over the place (both bearish and bullish). Price action looks a little shakey, but alts are still holding up well and ETH still is holdings its previous highs as support. Meanwhile, BTC hasn’t even retested its last consolidation range of $30k – $40k. We don’t go proper bearish until we start losing major support levels, and that hasn’t happened yet. Meanwhile, we know we can see 20% – 40% corrections in crypto bull markets, and the drawdown so far is about 23%. In short, we will have to wait for more clarity.