Bear market vs short-term correction…mixed outlook for crypto

Crypto Now

Bitcoin briefly below $110,000

Some altcoins plunged more than 90%

"Only a risk readjustment" forecast too

Bitcoin's rapidly rising price recently plunged, and opinions on the outlook are divided. While a roller-coaster market is expected to continue for the time being, the views that "a downtrend has begun" and that "this is only a short-term correction" are likely to coexist.

According to CoinMarketCap on the 12th, Bitcoin's price plunged on the 11th and at one point fell below $110,000 during the session. Ethereum's price also broke the $4,000 level and at one point fell to the $3,500 range. Other major altcoin prices such as XRP and Solana also fell more than 10% in just that one day. Some altcoins plunged more than 90%. Earlier this month, cryptocurrencies were soaring amid a buying spree of alternative assets to hedge against currency value decline caused by rising debt in major countries.

U.S. President Donald Trump showing intent to wage another tariff war with China acted as a negative. On the 11th (local time), President Trump announced on Truth Social, "Starting November 1, I will impose an additional 100% tariff on China."

As fears of a renewed tariff war intensified, the cryptocurrency market experienced the largest-ever liquidation event. According to Coinglass data, after President Trump said he would impose additional tariffs on China, about $20 billion of forced liquidations occurred within 24 hours. This is more than ten times the liquidations that occurred during the COVID-19 pandemic ($1.2 billion) and the bankruptcy of FTX, the world's third-largest cryptocurrency exchange ($1.6 billion).

In financial markets, there is analysis that this cryptocurrency plunge and the large-scale liquidation event could be a signal of the end of the boom period. Cryptocurrency analyst Ali Martinez said, "This is a flow similar to the large-scale liquidations right before Bitcoin's downturn began at the end of 2021," adding, "This plunge may not be a simple price correction."

There are also many views that this is a short-term correction. Jamie Coutts, chief cryptocurrency analyst at RealVision, analyzed, "This plunge is merely a risk readjustment," adding, "The market-wide structural uptrend remains intact."