Bitcoin's 24% Correction 'Mostly Technical' Say Experts

A sharp decline in cryptocurrency sentiment, dubbed a “mega nuke” by analysts, has gripped the market as Bitcoin BTC/USD fell below $79,000 on Thursday evening, down 24% from its January peak of $109,590.

Major altcoins including BNB BNB/USD, Solana SOL/USD, and Dogecoin DOGE/USD all fell down between 12 and 15%.

What Happened: Speaking with Benzinga, experts attribute this plunge to a mix of technical corrections, regulatory uncertainty under the Donald Trump administration, and a $1.5 billion Bybit hack, with industry voices offering varied perspectives on the downturn's drivers and potential recovery.

Bitfinex analysts pinpointed multiple triggers for the sentiment crash.

"The combination of a sharp Bitcoin price drop, regulatory uncertainty, security breaches and declining altcoin valuations has led to extreme fear in the crypto market," they stated, noting Bitcoin's drop to $82,925 yesterday and a 40% slide in altcoin market cap from $1 trillion since December.

They also highlighted the Bybit breach's role in amplifying volatility and social media negativity, key factors in their fear index.

The B2BINPAY analytics team framed the correction as technically driven rather than fundamentally flawed.

"There is actually no real fundamental reason behind the panic over BTC positions," they said, pointing to a 6% drop today following a 10% plunge on Wednesday—the first significant pullback since Bitcoin's all-time high six weeks ago.

They warned that a failure to rebound from the $71,880 support level could signal further declines, though they see altcoins like XRP/USD recovering faster.

Also Read: EXCLUSIVE: Bitcoin ETFs With Staking Could Transform Institutional Adoption, Says Bitlayer Co-Founder

Why It Matters: Peter Chung of Presto Labs tied the downturn to institutional moves and macroeconomic pressures.

"The $1B outflow from Bitcoin ETFs highlights a targeted unwind in BTC exposure, likely driven by profit-taking and risk reallocation after a volatile February," he observed.

He suggested that while Federal Reserve caution post-rate cuts weighs on risk assets, global money supply growth could provide a counterbalance if it reaches crypto markets, though near-term support hinges on Bitcoin reclaiming $90,000.

Tracy Jin of MEXC viewed the correction as a healthy release of risk.

"The recent market has concentratedly released risks and negative factors, which is beneficial for the subsequent market trend," she said, advising medium- to long-term investors to buy the dip while monitoring macro policy shifts.

Alex Kuptsikevich of FxPro noted the market's oversold state, with Bitcoin's 8.6% daily loss testing short-term buyers' resolve, though he cautioned a drop to $70,000 could erase recent gains tied to Trump's election.

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