The cryptocurrency market is facing a sharp correction today, after the recent market-wide rally. Bitcoin (BTC) has dipped to the $121,000 price level, two days after hitting a new all-time high of $126,080. Other assets are also following BTC’s downward trajectory. According to CoinGlass data, the crypto market saw about $666.76 million worth of liquidations in the last 24 hours. The dip has put a question mark on the “Uptober” trend. Let’s discuss why the crypto market is dipping right now.

Why Is The Cryptocurrency Market Facing A Correction?

The latest market dip could be due to investors booking profits after the recent price surges. Apart from Bitcoin (BTC), Binance’s BNB coin also climbed to a new all-time high. However, BNB seems to be the only major cryptocurrency trading in the green zone today. The larger cryptocurrency market, however, seems to have fallen victim to major liquidations.

Macroeconomic uncertainties could be another reason for the market dip. The US dollar has lost substantial value over the last few months. Investors seem to be moving their capital to safe havens such as gold. Cryptocurrency investors may be following a similar pattern as well. The debasement trades could be a reason for the latest market dip. Gold, on the other hand, hit a new all-time high today, breaching the $4000 mark for the first time.

Will The Market Recover?

While the dip is concerning, the cryptocurrency market may recover over the coming days. October is historically a bullish month for the crypto market, popularly called “Uptober.”

Moreover, the Federal Reserve may introduce another round of interest rate cuts this month. Another interest rate cut could lead to a substantial increase in risky investments. The cryptocurrency market could benefit from such a development.

Also Read: Bitcoin vs. Gold: Which Will Give Better Returns By 2030?

However, macroeconomic challenges and trade wars could lead to increased volatility and uncertainties.