The crypto market crash has witnessed a pullback of 10% this week. Amid this pullback, the retail sentiment to buy-the-dip fails to find a bullish turnaround. While the intraday recovery provides some relief, analysts advise “brace for impact.”
By Vishal Dixit
Edited by Marco T. Lanz
Updated
4 mins read
In the first three days of this week, the total crypto market dropped by nearly 12.5% from $3.14 trillion to $2.75 trillion. During this downfall, the Bitcoin BTC $93 843 24h volatility: 4.0% Market cap: $1.86 T Vol. 24h: $57.48 B price dropped from $96,000 to $84,000. This accounted for a 13% drop.
Currently, the total crypto market cap is witnessing a short-term intraday recovery of 2.72%, rising back to $2.83 trillion. Amid this recovery, Bitcoin has bounced back to $86,833, marking an intraday recovery of 3.29%. With this short-term recovery, has the crypto market crash bottomed out, or is a steeper correction on the horizon?
In the 2021 bull market, before hitting a new all-time high, the BTC price dropped nearly 53% in value. Hence, the historical data generalizes the extreme volatility and paints an optimistic future.
As per the analyst, buying when prices rise and selling when they fall is the worst investment strategy. Furthermore, the analyst highlights his previous tweet where he predicted a 30% potential dip from the all-time high.
As per his tweet, the estimated pullback was from $110,000 to $77,000.
In an X post, Ali Martinez, a crypto analyst, has highlighted the potential reversal chances in Bitcoin. The analyst shares Bitcoin on-chain trader realized profit and loss margin for a reversal prediction.
Since 2022, the best #Bitcoin $BTC buying opportunities have occurred when traders' realized loss margin hits -12%. Right now, it stands at -8.25%! pic.twitter.com/ftJ0xQn2qz
— Ali (@ali_charts) February 27, 2025
Since 2022, the buying opportunities have occurred when the trader realized the loss margin hits -12%. Currently, it is at -8.25%, which signals more room for a pullback before a bullish turnaround.
Based on the recent tweet by Santiment, more than 10 Bitcoin wallets have collectively dumped 6,813 BTC in the past week. This correlates with the recent price fall of nearly 20%.
Over the long term, the Bitcoin price is driven by the whale and shark’s behavior. Specifically, the wallets that contain more than 10 Bitcoin.
🐳 Over the long-term, Bitcoin prices are correlated closely with the behavior of whales and sharks (specifically wallets with 10+ $BTC). Since last week, these key stakeholders have dumped ~6,813 coins, the largest drop since last July.
Look for accumulation from this group as… pic.twitter.com/HCuEShf2Gc
— Santiment (@santimentfeed) February 26, 2025
Due to this massive dump by key stakeholders, Bitcoin is likely to experience a steeper correction ahead. As per Santiment, this is the largest drop from whales and sharks collectively since last July.
Furthermore, the increased optimism in the crypto market of a bullish comeback by retail traders has generally led to a prolonged correction. This is based on the recent Santiment post, which highlights the social media mentions of buy vs. sell calls.
📉 Prices move the opposite direction of the crowd's expectations. And with retail traders eager to buy crypto dips over the past couple of days, we're continuing to see prices bleed. Typically, we will see a bounce as soon as retailers are no longer interested in dip buying. pic.twitter.com/aCVX7uZpey
— Santiment (@santimentfeed) February 26, 2025
Traders believing in a quick rally often see the price correcting back down. This has happened consistently over the past three months, where the retail trader sentiment has been completely opposite to the upcoming price trend in Bitcoin.
As per the daily chart, the BTC price trend reveals a breakdown of a local support trendline. This has breached the S1 pivot support level at $91,265.
Bitcoin Crypto Price Chart
Currently, the lower price rejection in the previous intraday candle has driven a short-term recovery to $86,000 levels. The fresh green candle, after four consecutive bearish candles, forms a potential bullish-harami pattern.
However, if the BTC price finds closing under the $84,000 mark, the downtrend is expected to continue to the S2 support level at $80,000. On the bullish front, the immediate resistance for Bitcoin remains the $90,000 psychological resistance, followed by the S1 support-turned-resistance level at $91,265.
Hence, based on the recent posts by Santiment and a few analysts, the short-term recovery in Bitcoin comes as a short relief and could witness a steeper correction. Based on price analysis, this puts the short-term price target for Bitcoin at $80,000.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
