Bitcoin (BTC-USD) – This Correction Is Probably Not Over Yet

Bitcoin (BTC-USD) has experienced significant market fluctuations over the last few weeks. While Bitcoin spent most of the spring with a boring sideways consolidation, volatility has exploded in recent weeks. Hence, the exuberant ETF euphoria is gone and pessimism is spreading among investors.

Since the new all-time high of USD 73,793 on March 14th, Bitcoin and all those new Bitcoin spot ETFs like IBIT, FBTC, BITO, ARKB, BITB, HODL, BRRR, EZBC, ARKW, BITX, BITQ, WGMI, BTCW, BTF, STCE and BETH as well as the Grayscale Bitcoin Trust (GBTC) initially only digested its enormous price gains slowly and sluggishly through a sideways consolidation until mid-June. From mid-June onwards, there was a first sharp pullback down to USD 53,550, from which Bitcoin was able to recover in no time. However, the round psychological resistance of USD 70,000 could not be recaptured again.

Instead, due to numerous factors, global stock markets came under pressure from the end of July. A treacherous mix of geopolitical tensions, an interest rate hike by the Bank of Japan, weak US economic data and fears of recession led to selling pressure on US technology stocks.

As expected, the closely correlated Bitcoin could not escape this massacre. Hence, over the first weekend of August until Monday, 5th of August, there was a dramatic crash in the crypto sector, too. With a low at USD 49,577, Bitcoin fell to its lowest level since February 12th. Almost all of the gains since the launch of the Bitcoin Spot ETFs were temporarily wiped out, and the correction we had been expecting for months finally became reality.

But Bitcoin wouldn’t be Bitcoin if it hadn’t immediately staged a sharp and impressive bounce back to USD 62,729 in the following days. This rapid recovery shows that confidence in Bitcoin’s long-term prospects remains intact, despite existing macroeconomic risks such as recession concerns and geopolitical tensions.

At the same time, however, the general mood in financial markets has quickly improved again over the course of last week, too. This may have contributed to the positive dynamics in the crypto sector in recent days as well.

Overall, it is still too early to call for the end of the correction in the stock markets. Accordingly, caution is still advisable when it comes to Bitcoin.

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