Crypto Expert Explains Why The Bitcoin Price Crash To $40,000 Is Not A Bad Thing

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A crypto expert has explained why a Bitcoin pullback (possibly to around $40,000) isn’t a bad thing. This comes as there is a growing concern that the flagship cryptocurrency could soon lose all the gains it has achieved in recent times. 

A Bitcoin Correction Is Necessary

In a post on his X (formerly Twitter) platform, William Clemente, the co-founder of Reflexivity Research, suggested this correction was necessary as it would “shake out “weak hands” and leverage, allowing for a stronger foundation for eventual moves higher.” He further mentioned that Bitcoin’s volatility “is a feature, not a bug.” 

He made this statement in relation to his assertion that the crypto token has doubled in two months with no pullbacks. Although it hasn’t exactly doubled, Bitcoin has, however, experienced a significant surge these past few months. This has come on the back of the possibility of the Securities and Exchange Commission (SEC) approving the pending Spot BTC ETF applications.  

This impressive rally has indeed happened, with the flagship cryptocurrency hardly experiencing any pullback. The bulls have firmly remained in control, with the bears having to bear the brunt of this as many continue to experience heart-wrenching liquidations. However, just like with every other asset, a correction is always expected at some point, and that could be now. 

BTC price recovers above $42,000 | Source: BTCUSD On Tradingview.com

A BTC Correction is Already Happening

Bitcoin is already facing a retracement as more longs than shorts have liquidated in the last 24 hours, according to data from Coinglass. In an earlier X post, Clemente had warned that there would “be sharp corrections along the way as the market shakes off greedy leveraged longs.”

Meanwhile, the reason for the breather from Bitcoin could also be a result of those waiting on the sidelines to see the outcome of the macroeconomic events happening this week. This includes the CPI inflation data that is set to be released on December 12, which will be closely followed by the FOMC meeting happening on that same day and December 13. 

Many will be hoping that the outcome of those events is rather positive as that would further ignite the bullish sentiment that is currently reverberating throughout the crypto community. Irrespective of what happens, this sentiment isn’t expected to dwindle as many still have their sights set on January when a Spot Bitcoin ETF could be approved

Liquidity is also flowing into the ecosystem, with digital asset investment products experiencing their 11th straight week of inflows at $43 million. Bitcoin remains the major focus of these investors, with the flagship crypto token seeing $20 million in inflows. 

At the time of writing, Bitcoin is trading at around $42,000, down in the last 24 hours, according to data from CoinMarketCap. 

Featured image from Navi, chart from Tradingview.com

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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