Crypto market overview: Bulls take profits home, bears get their guns ready

• The market has entered a correction phase with XRP losing over 18% in a single day
• The upside was substantial, but it was not a trend yet.

The correction is upon us. After the best week since July 2018, the global cryptocurrency market entered the correction phase losing over $10 of its value in a single day. Bitcoin slipped below $6,500 handle to trade at $6,410 by press time. The digital coin No. 1 has lost nearly 4% on a day-to-day basis and 2.2% since the beginning of Tuesday. Obviously, the bearish momentum is gaining traction as BTC/USD moves quickly towards the next critical support at $6,400.

Ripple's cryptocurrency turned from a bull's star to an outsider. The third largest coin by market value has lost over 18% in recent 24 hours to trade at $0,4660 at the time of writing. Considering an eye-popping growth during the previous week, XRP/USD was ripe for correction; however, the sell-off is pretty violent, which means that a healthy correction may morph into a new downside trend.

Ethereum is down 9% since this time on Monday, trading at $221. The second largest coin moves in lockstep with the broader market retreating from the territory conquered during the previous week. 

The speculative nature of the cryptocurrency market suggests that the retracement is caused by profit-taking after a strong rally across the board. However, only time will tell, whether the upside momentum of the previous week will have legs or we are about to revert to the bearish trend that has been dominant since the beginning of the year. According to Kevin Davitt, a senior instructor at The Options Institute at Cboe Global Markets, this rally was not the first over the course of the recent months, but they failed to change the long-term momentum.

“There have been at least five significant moves higher (in percentage terms) for bitcoin since the decline began in earnest in early January. While cryptos may be moving with relatively muted volatility in the short term, there’s no guarantee that will continue,” he explained.