According to Greeks.live, on January 8, 2025, the cryptocurrency market faced a significant downturn as major U.S. technology stocks such as Nvidia and Tesla saw considerable declines. Bitcoin, the leading cryptocurrency by market capitalization, fell below the crucial $100,000 mark, a level it had briefly recovered in the preceding week. This decline was exacerbated by a broader market sentiment that turned increasingly pessimistic, particularly affecting altcoins which suffered even more severe losses. The correlation between the cryptocurrency market and traditional equity markets was evident as investors shifted away from riskier assets amidst economic uncertainties.

The trading implications of this market correction are substantial. As Bitcoin broke through the $100,000 support level, it triggered a series of sell-offs, causing a cascading effect across the crypto market. Altcoins, which typically exhibit higher volatility, experienced pronounced declines, with some tokens losing over 15% within hours. This market movement suggests a heightened risk aversion among traders, who are now looking for safer asset classes. The source indicates that the shift in market sentiment is likely to affect trading strategies, with many traders potentially adopting a more defensive posture, focusing on minimizing losses rather than seeking short-term gains.

Technical indicators further illustrate the shift in market dynamics. The source notes a rebound in short-term implied volatilities (IVs) in options data, indicating increased uncertainty and potential for further price swings. Trading volumes surged as traders rushed to adjust their positions, indicating a high level of market activity. The RSI (Relative Strength Index) for Bitcoin dipped below the 30-mark, suggesting that the asset was entering oversold territory, potentially signaling a near-term buying opportunity for risk-tolerant investors. However, the overall market depth has shown signs of thinning, with fewer buy orders at current levels compared to sell orders, reflecting the prevailing bearish sentiment.