In the past seven days, the crypto market has experienced a drop of more than $63 billion, as major cryptocurrencies recorded double-digit drops.

Bitcoin (BTC), the most dominant cryptocurrency in the market, fell by 12 percent from $4.300 to $3,800, achieving a new yearly low. At its lowest daily point, on fiat-to-cryptocurrency exchanges like Coinbase and Kraken, the price of BTC fell to $3,456.

Ethereum (ETH), which is currently demonstrating a daily volume that is larger than that of Ripple (XRP) and Bitcoin Cash (BCH) combined at $2.2 billion, dropped to $98, falling to a double-digit for the first time since May 2017.

Is the Bottom Finally in?

With Ethereum at $98 and Bitcoin at $3,456, technical indicators show oversold conditions for both major digital assets. Possibly due to oversold conditions, BTC has recovered relatively quickly from the $3,400 mark to $3,700 within hours.

At $3,456, BTC is down 82.2 percent from its all-time high at $19,500. When the price of BTC initially declined to $4,000, many investors suggested the possibility of a further drop below the $4,000 mark given that at $4,000, BTC was only down 79 percent from its all-time high.

On average, BTC tends to drop 85 percent during a major correction as shown in past price movements in 2011, 2013, and 2015.

Following BTC’s expected drop below the $4,000 mark, traders became more comfortable in finding a short-term bottom in the price trend of BTC.

A cryptocurrency trader and economist Alex Krüger said:

“Think that was it. Impossible to know if a bottom is a short or long term bottom. Possible to sense once a major bottom may be in by looking at high frequency price bars and volume i.e. when the elastic is ready to snap back. If it swings 15-30% off the lows, that’s a major bottom in % terms.”

Hsaka, a technical analyst, emphasized that it is too early to call a short-term bottom for Ethereum given that it has experienced a significantly steeper drop in comparison to BTC.

“Really stumped here. That wick could be chalked up to cascading liquidations and thin books. Looking for a HL on any retrace to confirm a daily bottom,” Hsaka said, echoing the sentiment of many investors in the market who are cautious towards the short-term trend of the third most valuable cryptocurrency in the global market.

Market Will Need a Strong Recovery Period

The cryptocurrency market has experienced large-scale bear markets in the past. While the infrastructure of the market is drastically different in 2018 with the involvement of major financial institutions, liquidity providers, and regulators, the sheer intensity of the drop of leading cryptocurrencies will likely require a long consolidation period.