Bitcoin crashed around 7% in a few minutes sending investors into a frenzy. Over the last week, we have seen Bitcoin rise over $9,000 for the first time in many weeks. But the rise didn’t last long. On Sunday, however, Bitcoin slipped off the high edge and crashed in a matter of five minutes.
From $9,150 to $8,600, there have been questions about the sudden crash. Bitcoin even reached $8,450 in some exchanges, causing worry to the investors and crypto lovers.
Predictions of the Analysts
While liquidation of over-leveraged longs could be the reason for the sudden fall, analysts came up with more theories about the crash.
The quick liquidation could have caused the domino effect, sending more investors to sell as the price dips. This puts further pressure on the market and results in a rapid crash.
DataMish.com stated that on BitMex exchange alone, more $108 million worth of long contracts were liquidated. By adding the trading figures of Binance, Deribit, and other major crypto exchanges to this amount, we can understand the scenario.
That said, not all of $108 million was liquidated. The final amount is expected to be around $10-$20 million. The sudden short-term price movements can result in higher market volatility and cause a dip in the price.
CryptoParadyMe, a crypto trader, tweeted that this crash is a clear indication of the rejection at the three-day Ichimoku Cloud. The trader shared a graph to show that the cloud would trade at a much lower rate in the coming days, and Bitcoin could possibly fall to lower.
CryptoHamster, another crypto trader, endorsed and agreed with the assessment. The tweet by the trader detailed the bearish sings noticed on the cryptocurrency chart over the last few weeks. The tweet mentioned many factors such as-
- Fisher Transform seeing bearish crossover for the first time in some time.
- Rejection of Bitcoin price at the 200-day simple moving average.
- Negative Fund Rate.
- 50% Fibo pull back.
- Signs of Bitcoin being oversold during daily transactions.
The graph shared by the trader showed Bitcoin on the verge of falling out of the rising wedge.
A top trader, DonAlt, stated two scenarios related to the crash. The tweet said that if this is a bearish effect, it would end this month. But if it is a bullish effect, the trader warned the investors to be positioned better.
Is It Possible For This Move To Be Bullish?
Even as many traders and analysts leaned towards the bearish market, some said that this could imply a bullish market in the coming weeks.
Other analysts and traders were pretty rational and said that it is common for the markets to go up and down. They mentioned that this crash could be only for the short-term and that Bitcoin would probably rise high again.
Apart from Bitcoin, Ethereum lost around 12.85% of its value, and DASH was down by 15.6%. Still, the total market capitalization of all cryptocurrencies is around 8.5% higher than what it was a week ago.
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