Market Update: How Long the Correction Will Last
The crypto market is in the middle of a correction.
The crypto market is in the middle of a correction. Even on Wednesday, July 30, the numbers are red. Bitcoin (BTC) is down 0.2% on the day, Ethereum (ETH) down 0.4%, and XRP down 0.8%. Altcoins are taking heavy hits on a weekly basis. XRP is at $3.12, more than 10% lower than a week ago. Dogecoin (DOGE), still the biggest memecoin, is down 16.2%.
Overheated after all-time high
The current pullback follows a clear overheating of the market, shortly after Bitcoin's new record of $122,838 on July 14. According to analyst “Crypto Dan,” the correction isn’t a surprise. On CryptoQuant he points to a notable uptick in short-term investors as a warning sign: “When you look at the share of bitcoins held for just one day to a week, you see the market is in a temporary overheated phase. A brief cooling is now logical.”
All eyes on the Fed
Whether the market continues to correct or instead recovers depends in part on the U.S. Federal Reserve’s rate decision, expected Wednesday evening at 8:00 p.m. Netherlands time. Despite rising inflation, the Fed remains cautious. Only 4% of analysts expect a cut of 25 basis points to 4.25%.
Crucial will be Fed Chair Jerome Powell’s press conference at 8:30 p.m. If he hints at future rate cuts, it could give a bullish spark to the crypto market.
Altcoins as recovery winners
If the recovery starts, altcoins in particular could benefit. Ignacio Palomera, CEO of the Web3 network platform Bondex, told BTC-ECHO: “While Bitcoin by market cap remains the undisputed king, altcoins like Ethereum, Solana, and XRP are currently growing faster in value and interest.”
Crypto Dan ends on an optimistic note: the correction is temporary, in his view. He expects the second half of the year to bring further gains, with a pause before the next sprint higher.
