Bitcoin (BTC) price plunged by about $3,400 in an hour, warning traders that corrections during a parabolic move are likely to be sharp. Data from Glassnode shows that the fall resulted in the liquidation of Bitcoin futures long positions worth about $190 million on Binance within an hour, the largest to date.
In a strong uptrend, corrections are swift but short-lived because investors who expect the rally to continue use the dips to buy.
Binance US CEO Catherine Coley believes the Bitcoin could climb to “$75,000 to $100,000” by the end of this year. Meanwhile, investor Raoul Paul is even more positive as he anticipates Bitcoin to hit anywhere between “$400,000 to $1.2 million” in 2021 if the bull trend continues.
The huge bullish projection in BTC price is largely due to the institutional adoption of Bitcoin. In a recent interview with BBC, Galaxy Digital founder and CEO Mike Novogratz said: “As the institutions move in, there just is not a lot of supply […] There are a lot more than 21 million millionaires out there.”
While the retail traders may have missed out on Bitcoin’s rally, they are coming back with a vengeance by buying altcoins that have surged to multiyear highs in the past few days. This has pulled Bitcoin’s dominance to below 69%.
However, will the rally in Bitcoin and the altcoins continue or is it time for a few days of consolidation or correction? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
Bitcoin’s most recent leg of the uptrend had pushed the relative strength index (RSI) deep into the overbought territory, suggesting frenzied buying by the traders. Usually, such a phase is followed by a shakeout and that is what happened today.
The BTC/USD pair plummeted to an intraday low at $27,762.34, just below the 38.2% Fibonacci retracement level at $28,382.75. This sharp fall was aggressively purchased by the bulls as seen from the long tail on the day’s