Following a recent increase and a $ 550 billion decline over the weekend, cryptocurrencies have entered a correction zone, as several market analysts predicted, and significant risks for BTC, Ethereum, and other cryptocurrencies are expected in the next weeks.

In the last four weeks, bitcoin traders have reported three-week losses, with the digital currency now trading at $ 47,256, down 4.1 percent.

The most significant sell-off occurred in Asia, as credit-backed investors liquidated the majority of their BTC positions on Saturday morning, bringing the price below the 200-day moving average ($ 46,300) and triggering further selling.

The euphoria around the approval of the first Bitcoin ETF (NYSE: BITO) in the United States appears to have subsided, but "some traders have returned to the market feeling that the worst is over" after "credit support has been withdrawn in the past few days."

However, this is a cautious rebound, with few people expecting significant growth in the foreseeable future.

The reason for this is that the US Federal Reserve System is expected to tighten monetary policy sooner than expected, making cryptocurrencies, which are considered risky assets, less tempting.

Furthermore, debt margins on US stocks are at an all-time high, according to monthly statistics from the Financial Industry Regulatory Authority (Finra). Because bitcoin and equities are so closely linked, it would be foolish to discount this indicator, especially at a time when the possibility of a faster decrease in bond purchases and rate hikes is on the table.

The $ 935 billion in debt raised since October at a record low interest rate puts not only the stock market, but also cryptocurrencies, at danger, because tightening financing conditions can balance out the good effect of the loan margin and accelerate the selling.

The continuous normalization of monetary policy puts equities and cryptocurrencies like Bitcoin, Ethereum, Cardano, Binance Coin, Ripple, and Solana at risk.

"Unless spectacular things happen," Filbfilb, a cryptocurrency trader, told Cointelegraph, "the $ 50K mark will operate as a brake for some time."

However, there have been some hopeful developments, with many negative holdings decreasing as a result of the weekend sell-off, as demonstrated by the Fear and Greed Index, which is presently at 16 points, its lowest level since mid-July. The Fear and Greed Index is used to measure market emotion, with values less than 20 indicating a high level of "fear."

Prior to the BTC surge in October, the index fell below 20 for four months before settling into a negative trend. The same scenario could play out in the medium future.

On a technical level, support for $ 46,300 should continue to be a primary signaling region for BTC, with further supports around $ 41,605, $ 39,904, and $ 37,636 in the event of a breakout.

Aside from the psychological barrier of $ 50,000, the 100-day moving average at $54,514 is critical, as it might serve as a tipping point for a new high in Bitcoin.

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