The cryptocurrency market experienced significant declines in the past 24 hours as Bitcoin and Ethereum faced sharp drops. However, current data suggests potential recovery and support at key levels.
Sharp Crypto Market Sell-Off
The cryptocurrency market has faced a major sell-off in the past 24 hours, with Bitcoin (BTC) experiencing a sharp decline of over 5%, dropping as low as $91K before recovering to around $94K. Ethereum (ETH) was hit even harder, suffering a massive 19% plunge, falling to $2,159 before bouncing back to $2,500. The primary catalyst for this crash appears to be the renewed tariff wars triggered by Donald Trump, which has spooked the market.
Bitcoin and Ethereum Support
Despite the plunge, both Bitcoin and Ethereum have shown resilience by holding key support levels. Bitcoin, after hitting its low of $91K, has managed to recover above of $94K and is currently testing the support at the 100-day simple moving average (SMA). Ethereum, on the other hand, found strong support at the $2,100 level and has since recovered to $2,500, with support from its 200-day SMA.
Potential Bear Trap
Some analysts are speculating that this could be a 'bear trap,' which occurs when controlled selling causes a temporary drop in price, fooling traders into thinking a larger price decline is imminent. In such scenarios, the market often rebounds sharply, trapping those who shorted the market. Given the current price action of both Bitcoin and Ethereum, which are recovering after holding strong support levels, this sharp decline could very well be the ultimate bear trap setting up for a massive rebound in the coming days or weeks.
While it’s too early to predict with certainty, the recovery from these support levels suggests that the market might be poised for a reversal rather than a continued downtrend.
