After the overall rally on Tuesday, profit booking during early trading hours in Asia has led to around 2.5% slide in the overall crypto market cap in the past 24 hours. The world's largest crypto Bitcoin (BTC) is currently trading 2.94% down at $83,313.48, sliding below the psychological mark of $85,000.

Other major crypto coins, Ethereum, XRP and Binance Coin are also trading lower by up to 5%. Blockchain Solana is currently down 6.01%, while DOGE is also trading 4.68% lower. Other cryptocurrencies like Cardano and LEO are also trading at -6.37% and -0.39%, respectively.

In line with a fall in the equities market, the global crypto market cap stands at $2.64 trillion today, 2.52% lower than the last day.

Despite the recent decline in major cryptocurrencies, market sentiment remains cautiously "optimistic". Bitcoin's drop below $84,000 and Ethereum's falling staking balance show "investor nervousness", but the recent whale accumulation and technical indicators indicate strength, Avinash Shekhar, Co-Founder & CEO, Pi42.

One driving factor behind the caution is the U.S. Federal Reserve's latest statement, especially by Fed member Raphael Bostic, which warned of a "thick fog" looming on the U.S. economy's horizon. These works indicate ongoing inflationary worries and potential delayed interest rate reductions, which could impact financial markets, including crypto, Shekhar adds.

"While institutional demand and strategic buying persist, the crypto space appears to be positioning itself for a possible rebound, stating that in the face of uncertainty, conviction and long-term belief in the crypto market continues to guide investor behaviour," says Shekhar tells Fortune India.

Alankar Saxena, Co-founder and CTO of Mudrex, agrees that investors' confidence remains "strong" on the hopes of a Bitcoin Strategic Reserve in the U.S. "This could make the U.S. a potential buyer of Bitcoin, significantly boosting demand for the asset," he says.

Another factor behind the optimism is that the number of Bitcoin Whales, individuals or entities who own at least 1,000 BTC to 10,000 BTC, has surged to 2,014, up 3.5% in a month. "BTC faces resistance at $87,200, while the immediate support stands at $83,000," Saxena adds.

However, many view it as a logical correction in the crypto market. The CoinSwitch Markets data shows BTC is sitting under both its 50- and 100-day moving averages. It attributes the current dip in the market to a broader market pullback, with U.S. equities also edging lower — the Dow Jones fell 0.4%, the S&P 500 dropped 0.2%, and the Nasdaq slipped 0.1% on Tuesday.