Bitcoin plummeted by $10,000 after reaching a new all-time high. Is a sharp correction a sign of a bull market?

Just last night, people were applauding Bitcoin as it broke through $69,000 to hit a new all-time high, but overnight its price briefly fell below $60,000. According to Coinglass data, US$1.18 billion was liquidated across the entire network in the past 24 hours, of which US$894 million was liquidated for long orders and US$286 million was liquidated for short orders.

After breaking through new highs, long positions began to be closed, and Bitcoin fell sharply, with a short-term amplitude of more than 2%. Perhaps we have long been mentally prepared for the correction after the all-time high, but the $10,000 correction really caught people off guard. The Bitcoin Volatility Index reached 78.81, near its highest value in a year, and at the time of writing, the price of Bitcoin was $63,802, according to Tradingview data.

This round of Bitcoin prices Due to the approval of ETF, the price and ecological development speed are obviously ahead of the rest of the crypto industry. The continuous increase and the statement of "a new high within the month" have caused FOMO sentiment in the market. Last night, the CEX funding rate once again reached a level of around 1%. A deep correction after reaching a new all-time high may be inevitable.

With the deep correction of Bitcoin, the previously outstanding Meme tokens also experienced general declines, with BONK, FLOKI, and PEPE all falling by more than 20% in 24 hours. The mainstream cryptocurrencies also retreated significantly. Among them, the price of Ethereum once fell below US$3,300, and SOL also retreated to US$105.

Bull market returns to watch out for Withdraw

This major correction reminds people of the 519 incident. On May 19, 2021, the Bitcoin market experienced its most significant liquidity event and price pullback since Black Thursday in March 2020. The sell-off follows a months-long consolidation above $50,000, which began after the market failed to sustain new highs and the much-anticipated Coinbase listing.

The most severe sell-off event on May 19 created the largest daily negative line in Bitcoin history, with an intraday price range of $11,506. Bitcoin prices are down a total of 47.3% since May 9.

519’s price action took a large portion of the market by surprise, especially since the event occurred during the longest bull run in Bitcoin history. At that time, all major exchanges went down.

Related reading: "Reviewing the 519 tragedy｜Every exchange went down one after another, FTX founder SBF posted a picture: FTX contract liquidation rate was only 2%》

As for As the market develops next, we can look at the catalyst for this bull market - ETFs. Despite a sharp drop in Bitcoin prices, Bitcoin ETF daily trading volume hit an all-time record of $10 billion.

Analyst at Matrixport, 10X Research researcher Markus also predicted that Bitcoin will reach $125,000. Today, Bitcoin has just exceeded 69,000, which is still nearly half the distance from the end of the bull market. Therefore, there is no need to worry too much about a sharp retracement in the bull market, especially when Bitcoin reaches a new historical high, retracement is also a natural phenomenon.

Related reading: "Exclusive interview with Matrixport analyst Markus: Bitcoin will reach $125,000, and the bull market is only half-way》