Bitcoin (BTC) and Ethereum (ETH), the two main cryptocurrencies in the market, have experienced a recent downturn, with both dropping more than 0.7% and falling back to $27,400 and $1,840, respectively. This decline has caused both tokens to erase a significant portion of the gains they achieved after the completion of Ethereum’s Shanghai update. Bitcoin has returned to its lowest level since the end of March, although its year-to-date rally is still over 60%.

Despite this drop in value, some experts remain optimistic about the long-term prospects of Bitcoin and Ethereum. Joe DiPasquale, CEO of crypto asset manager BitBull Capital, believes that the recent downturn is a healthy correction. He notes that as long as Bitcoin stays above $22,000, even in the worst-case scenario, more upward movement can be expected. DiPasquale sees the support zone between $25,000 to $27,000 as a positive sign for a continued move up.

Javier Molina, senior market analyst at eToro, also comments on the technical indicators affecting the market. He points out that $31,000 represents a significant short-term resistance level that prices have not been able to overcome. He sees existing divergences at certain indicator levels as an indication of a normal correction scenario down to $26,500 to $27,000. Molina identifies $25,000 as the last valid reference to maintain the bullish structure, and losing this level would open up a different scenario.

Apart from technical factors, regulatory developments are also playing a significant role in the cryptocurrency market. The approval of the European MiCA law, which aims to regulate cryptocurrencies and related activities, stands in contrast to the belligerent stance of the U.S. Securities and Exchange Commission (SEC), which continues to increase pressure on companies in the cryptocurrency sector. This regulatory uncertainty has an impact on market sentiment and can affect the value of cryptocurrencies.

Despite the recent downturn and regulatory challenges, many experts remain optimistic about the future of cryptocurrencies. They see the correction as a healthy and necessary part of the market cycle, and believe that Bitcoin and Ethereum will continue to have long-term value. As the market evolves and regulatory frameworks become clearer, cryptocurrencies are expected to gain wider acceptance and adoption.

In conclusion, the recent decline in Bitcoin and Ethereum prices has caused some concern in the cryptocurrency market, with both tokens dropping more than 0.7%. However, some experts view this as a healthy correction and see potential for continued upward movement as long as certain support levels are maintained.

From a technical standpoint, $31,000 has been identified as a significant short-term resistance level for Bitcoin, with potential support levels at $26,500-$27,000 and $25,000. Losing the $25,000 support level could signal a more bearish scenario for the market.

Regulation continues to be a factor impacting the cryptocurrency market, with the recent approval of the European MiCA law contrasting with the Securities and Exchange Commission’s (SEC) increasing pressure on cryptocurrency companies. This regulatory landscape may continue to impact market sentiment in the future.

As with any investment, it’s important to carefully consider risks and do thorough research before making decisions in the cryptocurrency market. Prices can be volatile and influenced by various factors, including technical indicators, regulatory developments, and market sentiment. It’s always advisable to seek advice from qualified professionals and make informed decisions based on individual circumstances.