Bitcoin (BTC) has seen a massive surge in the past two months, in particular, as institutions jumped into the new asset form. The latest is Blackrock,  announcing involvement in trading in Bitcoin futures while Grayscale continues to scoop up BTC at an accelerating pace.

Total amount of BTC held by Grayscale Bitcoin Trust. Source: CryptoQuant

However, after a massive surge, the nugget'due south cost has to come downwardly for some tests of support as investors take profit. This is the cute cyclical nature of supply and need.

BTC/USD is currently in a corrective phase since Bitcoin's rally became overextended above $40,000. The primary question is how far the correction will go from here or whether the $30,000 level will exist potent enough to fend off the bears.

$thirty,000 must concur to stay bullish

BTC/USDT 1-day nautical chart. Source: TradingView

The daily chart for Bitcoin shows a tremendous rally in recent months. However, some weaknesses are emerging since the contempo loftier, later on which the price corrected by roughly 30%.

I of these weaknesses is the continuing lower highs since the recent peak high at $42,000. These lower highs are confluent with weaker bounces from the support area.

In this case, the $30,000 area has held before. All the same, to the concern of the bulls, the bounces from this area are getting weaker.

If the $30,000 expanse doesn't hold, a further correction toward $24,000 becomes likely, which would mean a retrace of 40% since the recent highs.

Corrections are quite common in a bull market

BTC/USD 1-week chart. Source: TradingView

This weekly chart shows the previous bull bike from 2015 to 2017 highlighting some corrective phases.

First and foremost, the 21-week MA (the orange line) is an important indicator for the balderdash wheel to continue. Every bit long equally the price of Bitcoin sustains above this 21-Week MA, the bull cycle is ongoing.

Traders and investors should be aware of the fact that null goes upwards in a straight line. Corrections are healthy and organic for the markets to occur and could be used as an opportunity to purchase the dip.

The 2d important thing to note in this chart is the magnitude of the corrections. During the previous bull wheel, there were multiple corrections of thirty-40%that were speedily bought up before the bull cycle continued.

It is worth noting that altcoins could see more than downside as they are less liquid and hence, always more volatile than Bitcoin.

BTC/USD 1-week chart. Source: TradingView

Therefore, the ultimate end of the correction could occur toward the 21-calendar week MA. This indicator is currently moving around the previous all-fourth dimension high at $twenty,000. However, it'due south a lagging indicator, and corrections don't happen inside one week, meaning the 21-week MA would continue to go even higher in the meantime.

Ane possible scenario is the 21-week MA moving around the $24,000-26,000 in a few weeks from now. Such a correction would also be 30-40%.

Total market cap may retest previous all-time loftier

Full market place capitalization 1-week chart. Source: TradingView

The total market capitalization nautical chart is a great chart to watch during corrections.

While the likelihood that Bitcoin will retest its previous best high is very small. However, the likelihood that the total market capitalization volition test its previous all-time loftier is significant.

This retest would put the 21-calendar week MA of the total marketplace cap chart around the level of $750 billion, an important confluence with the 2018 best high. Therefore, investors and traders should be watching the $750 billion zone as crucial support for a potential bounce in the cryptocurrency market.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should deport your own research when making a determination.