The week started quite well for the crypto industry. The US CPI report positively affected the market and many experts believed that a short-term rally will happen with BTC establishing the new $18K support line.
Sadly, by Friday, the market entered a period of price correction that was brutal to long leveraged positions and created a new wave of doubt among retail traders.
The price is just correcting
It is too early to panic, but the reaction of the community was quite gloom. Many discussions are centered around the potential new bottom for the bear market.
People are reminding each other of the worst-case scenario prediction in which BTC reached $10K in the beginning of the year. While such a dramatic drop (over 47%) is probable, it is not something that we have to think about right now.
The 6.8% drop in just 48 hours seems scary, but it is just a price correction to the previous support level established in the end of November.
Remember that BTC recovered from a dip at that moment and was trying to stabilize following the FTX collapse which threw the market into a free fall. The current value of BTC is what the market perceives it to be after the crash.
The long-term situation is different. We are at the moment where a new strong trend may form. It can be negative and push the price down all the way to $10K.
It can also be positive and allow BTC to establish a new temporary support level. Many factors contribute to the formation of the trend and the resilience of Binance as well as new regulations will be decisive factors.
News stories like the publishing of the US CPI report is just a boost that happens locally on the price chart and does not affect the long-term trend.
Movements up and down are to be expected
The crypto market is still quite volatile on local timeframes with many experts pointing out that even a slight change in the overall narrative around the crypto market may cause a disturbance. Do not panic and keep watching the industry.