Bitcoin’s rally may be coming to an end as analysts look at potential market corrections for altcoins. However, most agree that momentum and sentiment are positive and the trend is upward. Glassnode analyst “Checkmate” commented on the potential pullback in the market on December 5. Specifically, he said, “I would be surprised if Bitcoin doesn’t consolidate [or] correct in the near term.”
Is a correction near for Bitcoin and altcoins?
The analyst added that a few months of rest “will allow investor cost bases to re-adjust above the True Market Average Price.” He also said the market had not given back more than 20% so far this year, “suggesting persistent and strong spot demand.” In the previous bull market, declines exceeding 60% were seen, but such a situation has not yet occurred in this bull cycle. It should be noted that these are bull market corrections and not bear market bottoms, which are typically declines of more than 80% from the previous peak.
JRNY Crypto reminded his 767k X followers that there was a major crash/correction before the last bull market. “Things are moving fast in the Crypto market right now, but keep in mind that we did a similar study in 2019, which was followed by one of the worst crashes I have ever seen right before the last Bitcoin halving,” he said. However, the big crash mentioned was due to the black swan event caused by the global market meltdown and the Covid quarantine in March 2020. “I wouldn’t be surprised to see at least one more market correction before the real bull market begins,” he added. This time, there’s a lot of geopolitical tension and economic uncertainty to deal with, so the bulls may not be ready to charge in just yet.
There may be a significant loss of liquidity
Trader Justin Bennett concluded that the last two bear markets ended with a second capitulation. “Don’t rule out a $25k liquidity sweep,” he added. Bitcoin remained stable at $41,600 today without gaining further value. As a result, the total market capitalization remained around $1.61 trillion. However, altcoins have already started to pull back, with the majority seeing red during Tuesday’s trading session. Most large-cap altcoins fell between 1 and 3 percent on the day. However, some took a bigger hit, such as Solana falling 7.2% and Chainlink dropping 5.8%. Moreover, altcoin markets lagged Bitcoin during this rally and only reached resistance after 18 months of consolidation.
42415
