Yesterday, as we reported, the market took a sharp turn for the worst seeing one of the worst drops in recent weeks. In less than an hour, the market had shed over $15 billion, dropping from a little over $146 billion to hit $130 billion.
Surprisingly, the bearish trend set in following extended gains that began late into last week. The drop saw the market not only wipe off the early hours’ gains recorded on Sunday but extend the drop to wipe off some the gains from the last couple of days.
Bitcoin which had managed to hit $4,200 backtracked to finally find support in the $3,800 position, a tragic drop that saw the leader lose $400 in minutes. Other top altcoins such as Ethereum and XRP have also wiped out gains dramatically. ETH has dropped from over $160 to $140 while XRP has dropped from over $0.33 to a little over $0.30.
Most coins at the time of press are recording losses in double digits. Bitcoin at the time of press is recording an 8% drop, trading around the $3,840 range. The reason for the sharp drop remains unclear but has certainly rattled a few feathers.
Although a price correction was imminent given the recent rally, what many didn’t expect is that it would happen in around an hour, something that certainly caused panic and saw prices overcorrect. So, could there be no need to panic after all?
Investors To Remain Cautious
Recently, we reported that if Bitcoin is unable to break the $4,200 it could drop to the $3,700 range. Notably, Craig Erlam, senior market analyst at Oanda, had expressed his position that Bitcoin would remain in the $3,200 to 4,200 for the next couple of weeks. Given how dramatically prices rose last week and the sharp drop, this could be true as investors will now be cautious about the bullish trends in the coming days.
Although Ethereum (ETH) could offer some positive development in a few days as the network undergoes an upgrade, many investors might sit out any upcoming bullish trend in fear of gains backtracking shortly after rallying.
The next couple of hours and days will be crucial with prices needed to keep their support positions high and avoid triggering sell-offs. For now, it is likely most coins maintain within the newly established price range for a couple of days.