Bitcoin has finally corrected lower after being on a bull run for most of this week. This is an expected development for a digital asset that has grown so much in such a short time. However, while some in the market lament this downward trend, it is important to note what a correction like this could mean for the digital asset. Because it can do more good than harm in times like these.
Is this correction bad?
For any recovery to the upside, there is bound to be a correction. This can be good or bad depending on the circumstances surrounding the market movements. This time bitcoin has started a recovery trend after making significant gains earlier this week. Now, for the current market, this seems to be more good for the digital asset given where the price has landed.
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Bitcoin had been able to go as high as $47,000 during its latest rally. This had helped cement the cryptocurrency’s place in the uptrend. However, after building up so much momentum, there was bound to be a downside and the result of that has been diminishing value.
These types of corrections during bullish rallies are always good. This is because they allow overbought indicators to change to reset their values to become good enough for investors again. Paving the way for even more money to enter the market in the wake of the correction.
BTC support level at $45K | Source: TradingView.com
Naturally, there remains a support zone where the digital asset cannot fall, so it becomes a problem for the asset. As long as Bitcoin can hold above $45,000, then the power still rests firmly in the hands of the bulls, which means the cryptocurrency is likely to continue on its current bullish path. If this is the case, then it is very possible that Bitcoin will see a big bounce coming. Most likely during the weekend when there is less liquidity in the market.
Bitcoin needs to hold on
In the short term, bitcoin has no problem registering an uptrend. The main issue now remains to consolidate this long-term position, and to do so, the digital asset needs to break above the 100-day simple moving average. It is already trading above this, but it is still a small margin. If the bottom of this correction can be stopped above $45,600, then this BTC will return to a long-term uptrend.
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It remains a buyer’s market, although the length of the latter will be determined by performance over the next week. A proper break above $47,000 will once again set the stage for another massive rally. However, $48,000 will be a very close battle given the low momentum.
BTC trade above $45,000 | Source: BTCUSD on TradingView.com Featured Image from FXComfort, Chart from TradingView.com
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