A massive market correction is currently happening on cryptocurrency markets as major assets retreat from recent highs. The big selloff, which initiated on Sunday, January 11, has resulted in a huge capital outflow of over $150 billion from the sector.
Total market capitalization hit a record high of just over $1.1 trillion this weekend but it seems that resistance was met there and profit taking began in earnest. By Monday morning’s Asian trading session, that figure had dropped to $950 billion where it appears to have found support.
Bitcoin retreats from ATH
Bitcoin has led markets into a pullback as it retreats from its all-time high of $42,000 late last week. It spent the best part of the weekend trading just below this level but broke down late on Sunday as the price plunged 17% over the hours that followed dropping them as low as $34,000.
At the time of writing, Bitcoin was changing hands for just below $35,000 and all eyes were on the charts to see if support will hold. Cryptocurrency traders and analysts are eyeing the $30k level if the correction continues to deepen.
If Bitcoin cannot break its previous all-time high on the next bounce back up, and it forms a ‘lower high’, then the pullback could accelerate even further. As it stands, a third red daily candle is forming which hasn’t happened since November, and the fall is the largest since March 2020.
Fellow analyst Josh Rager warned about altcoin positions as those tend to fall harder and faster than their big brother during market corrections.
“Naturally holding longer-term holds (including $BTC $ETH) – but certainly don’t want to be overexposed on altcoins at the moment,”
Crypto coins getting punished
As usual, the rest of the cryptocurrency market is getting hit harder than Bitcoin which has lost around 12% over the past 24 hours.
Ethereum, which peaked at $1,350 over the weekend, has fallen a hefty 16% over the past 24 hours sliding back below $1,100. XRP is in a similar position, collapsing 17% back to $0.27.
Litecoin is in pain below $145 as it sheds 18% on the day while Cardano, Polkadot, and Stellar are experiencing similar losses.
Aside from stablecoins, there are only a handful of cryptocurrencies defying the dump at the moment and they include Horizen, Bitcoin Diamond, and Dash.