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Bitcoin price dropped by more than 4% within one hour, led to the liquidation of $19.25 million on BitMEX

Bitcoin price dropped by just over four percent within an hour, from $ 9,224 to $ 8,745 after 52 hours with low volatility and volume. The sudden drop led to the liquidation of $ 19.25 million on BitMEX and $ 1.5 million on Bitfinex, causing a reasonably long tightening in a short time.

What triggered the abrupt Bitcoin price decline?

Usually, after a few days of low volatility in tight ranges, Bitcoin prices tend to see a significant move. Although extended periods are not necessarily geared towards a bearish action, in the case of Bitcoin as recently, it has witnessed a steady increase in volume with low volumes.

An uptrend with decreasing volume often indicates that its probability of being forged before a massive discount movement is high. The significant number of long contracts placed on large margin trading platforms, including BitMEX, Binance, and Bitfinex, and the low volume in the cryptocurrency market can make Bitcoin vulnerable to withdrawal.

Market data shows that some of the whales or individuals holding large amounts of Bitcoin sold tens of millions of dollars for $ 9,200, causing a strong reaction from long contract holders and buyers.

A trader who shared an exchange order book showed a $ 17 million market sold at $ 9,204, which was submitted shortly before adjusting to $ 8,000.

bitcoin-price-dropped-by-more-than-4-within-one-hour-led-to-the-liquidation-of-19-25-million-on-bitmex

$17 million in Bitcoin market sold | Source: Hsaka Twitter

In highly leveraged markets such as Bitcoin, a relatively small selling market, compared to the daily asset volume, can cause a great response from both buyers and sellers.

The Bitcoin market shows tens of billions of dollars in daily volume on paper. Still, since it is primarily leveraged on BitMEX, Binance Futures, and OKEx, the actual volume is significantly lower.

The low volume before an expected great event such as a Halving of the reward expected to occur in April of this year creates an ideal environment for extreme volatility.

Extreme volatility can be expected before Halving

As stated by cryptocurrency trader Jacob Canfield, historical data shows that half of the block rewards do not coincide with a protracted rally.

In the previous two drops, the Bitcoin price dropped right after Halving, with no signs of sharp increases until several months after the Halving.

Canfield noted:

Earlier, on March 7, as AZCoin News reported, the PlusToken scam had sent about 13,000 BTC to a Bitcoin mixer in the past 24 hours. However, this does not mean that they will sell all of them in a while, but the probability is high.

Analysts are still unsure whether the distribution of money will lead to an immediate sell-off, but support the theory that the sell-off will be quickly distributed. If correct, it could add selling pressure to the market.

Bitcoin price is likely to return to $ 8,400

Over the past few days, Bitcoin has begun to trend higher; since hitting $ 8,400 last weekend, the price of the leading cryptocurrency has risen as high as $ 9,250 on Saturday morning. While many optimists are saying that this price action is the precursor to an even more significant increase, such as $ 10,600, there is also an opinion that Bitcoin’s price will probably return to $ 8,400. in the next few weeks.

Well-known cryptocurrency trader Hsaka recently shared the charts below, showing a strange similarity between the four-hour Bitcoin chart from October 2019 and the two-hour chart from this month.

Both charts have a defined trading range, descending channel in the field, rising from that channel to another descending channel and deviation of the range with the static peak. The only thing a historical chart has is that the current chart is not a downtrend to retest the bottom of the range.

This means that should this fractal play out in full, and Bitcoin will trend lower over the next couple of days to trade at $ 8,400.

Dave the Wave, the trader predicts a pullback of up to $ 6,400 when Bitcoin is rising above $ 10,000, recently showing BTC is on its way to reaching $ 8,400 in the coming weeks, likely in May. Tu.

According to the chart, Dave hopes this will happen because Bitcoin falling to the local lows will satisfy its repeating pattern of occasionally revisiting a long-term curve that has predicted BTC’s overall trajectory for the past two years.

bitcoin-price-dropped-by-more-than-4-within-one-hour-led-to-the-liquidation-of-19-25-million-on-bitmex1

Source: TradingView

The fundamentals of Bitcoin remain decisively positive

Leaving aside concerns about short-term weakness, the fundamentals of Bitcoin are still decisive. Just this week, data from Blockchain.com showed that the Bitcoin network hashrate reached an all-time high of 136 exahash per second – almost three times higher than a year ago. The hash rate is almost around 940% from where it was when BTC was at an all-time high of $ 20,000. This is a sign that Bitcoin has never been more bullish.

Besides, as AZCoin News reported, the Reserve Bank of India (RBI), the country’s central bank, has deceived to appeal against the recent decision of the Supreme Court squashing the banking ban on cryptocurrency companies. The central bank is concerned that lifting the ban could pave the way for virtual currency transactions and put the banking system at risk. This move allows banks to facilitate banking transactions with cryptocurrency industry entities (specifically Bitcoin exchanges) once again, eliminating a significant barrier for the development of the sector.

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