Home Business 3 Reasons Bitcoin Has Crashed By 3,000,000 – And Why It’s Still...

3 Reasons Bitcoin Has Crashed By 3,000,000 – And Why It’s Still Bullish – Coindesk

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Bitcoin fell into a price crash early Thursday, missing a record high in a narrow margin earlier this week.

Top cryptocurrencies by market value It dropped from more than, 19,300 to 16 16,327 During the early European trading hours and lastly, around 17,200 were seen to trade, representing a 10% decline on a 24 hour basis. Coindesk 20 Information.

The sudden fall left many traders off-guard, with the cryptocurrency trading just 2% of its record high of, 19,783 on Wednesday.

So, what’s behind the 3,000 3,000 reduction? Here are three main reasons for the fall in prices:

1. Excess leverage

Bitcoin Matthew Deb, CEO of Stack Fund, told Koendesk that derivatives listed on major exchanges have been hit hard by leverage.

Derivative positions worth about ২ 2 billion have been canceled in the last 24 hours. Of that, more than 6 1.6 billion has been shut down in the last 12 hours, according to data sources Byte.

Neglect of the lifting business Was expectedSuch as the cost of long positions in the perpetual futures market, also known as the fund rate, rose to a multi-month high of 0.098% in the last few days – a sign of overlaving or overheating in the market. Funding rates are decided and paid every eight hours.

Read more: Futures Market Overheating Signs Bitcoin Faces Rising Instability

Bitcoin perpetual fund rate
Source: Glassnode

With the price decline, the source of money declined and returned to 0.01%, according to the data source Glassnode. As a result, the extra lift has crowded.

2. Technical pullback

Looking at the Bitcoin rally from 10,000 10,000 to 19 19,400 over the past seven weeks, it looked pretty high on the technical charts.

The momentum was so strong that the cryptocurrency consistently rose above the 10-day moving average (MA) despite buying above the 14-day Relative Strength Index (RSI) throughout.

Download -26-3

Bitcoin daily chart
Source: Trading view

Assets rarely show a 90-degree rally, as practitioners tend to book profits at regular intervals, dropping prices to their short-term moving averages. Cryptocurrencies have seen 20% or more pullbacks during previous bull markets.

The price reduction seen today has taken the cryptocurrency better than its 10-day average and allowed the RSI to re-sign in a more bull-friendly manner. “It’s a healthy pullback,” said Debbie of Stack Fund.

According to chart analysts, price assemblies with regular pullbacks are more durable than 90-degree climbs.

Some traders The location was Put options, as mentioned by Derbit Insights, or for pullback by buying a bearish bet.

3. Other factors include sales-expansion

According to businessman and analyst Alex Krueger, Coinbase CEO Brian Armstrong’s Tweet thread About the US Treasury Department Rumor plan Self-hosted cryptocurrency weakens the bullish move to track wallet owners, pushing the price backwards.

“This [regulatory concerns]Against the backdrop of curiosity, retreat and stable high growth in the long run, the biggest 24-hour decline since March, ”Kruger told Quindesk in a telegram chat.

“However, when it comes to Armstrong, it will be extremely bearish. “So far I can see that (in the short term) is very unexpected,” Kruger said.

The downward move may be widened by the announcement of the prominent cryptocurrency exchange OAEX. Withdrawal resumes.

“Most frozen bitcoins [on OKEx] CNF Benchmark CEO Su Chung said in a statement to Koindesk that about 70% of the transactions took place, so there were many unrealistic gains. “Once these coins were released into circulation, many traders probably realized these gains in their dollars and stabilcoins, adding more momentum to sales by selling them.”

Bitcoin had already dropped to around, 17,600 after the exchange lifted the suspension at 08:00 UTC today and fell to 16,350 the next moment. Bitcoin was around $ 11,500 when OKEX suspended withdrawals on October 16th.

Read more: Soon after the resumption of OKX withdrawals saw the largest bitcoin outflow in 6 months

Still bullish

The path of least resistance for bitcoin remains higher. “The latest price cuts are a word against the larger bullish trend,” Kruger said.

Indeed, bullish macro elements remain intact even as institutional participation increases, record money printing by central banks, and yield search prices fall.

Holding sentiment remained strong on Thursday, with the number of coins on the cryptocurrency exchange at 2,3846,91, the lowest level since August 201, according to data source Glasnod.

Glassnode-Studio_Bitcoin-Balance-on-Exchange-All-Exchange-3-2

The balance of the bitcoin exchange
Source: Glassnode

The data suggests investors see the current drop as a bull market pullback and remain confident about the long-term prospects of the cryptocurrency. This year the amount of metric has decreased by 17%, which means the liquidity in the market has decreased.

In the end, today’s price plunge has surpassed the excessive enthusiasm, as mentioned above. With the generalization of the cost of holding long positions, Bitcoin can now chart more sustainable assemblies to record higher.

CryptoBroker’s Husher expects the cryptocurrency to consolidate between ,500 17,500 and ,000 19,000 in the short term before the uptrend resumes.

“Bitcoin is not at the top yet,” said Siddharth Menon, co-founder and COO of the Mumbai-based WazirX Exchange. “I see many more pro-traders taking positions on Bitcoin. These are healthy positions because they don’t always enter, but adds funds when they go up or down. “

Read more: The price of Bitcoin will drop by about 3,000 3,000 with the fastest sell-off in 12 weeks



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