The price drop we saw in bitcoin last weekend was quite surprising. I was clearly not expecting this dream suddenly. I used to ask myself "what's going on?" We know that BTC is a highly volatile entity, as you know, but this time we saw something extraordinary and this is why I think.
The BTC price has never been stable. We see red days almost as often as green ones even in the bull market. A 1-2% change in price in a single day is an extraordinary event for S&P, but nothing for Bitcoin. When you zoom out on a monthly chart, BTC looks a lot more stable. You clearly see the trend. At first glance, the 15% drop from the previous weekend does not seem special. The bulk of the FUD, mixed with the hash rate decline, caused a certain market movement and triggered automatic sales and liquidations. In any BTC bull in the past, we've seen a price depth of 20-30%. It is usually a healthy fix. Considering that BTC has been in the green zone for a very long time, many experts expected something like this. Yet, as always, the devil is hidden in the details.
A 15% correction is expected. A 15% drop in a single day is something we haven't seen since the early days of the market. When I started looking for the biggest drops in the daily BTC price, I found this chart:
As you can see, more than 15% BTC drops in a single day have happened many times before. Mostly the most important problem that occurs in the first days! The BTC price was a fraction of the current price. The market was small and very volatile. As the market grew, such events became rare. If you exclude the March 2020 drop caused by the global pandemic, the last drop caused by market dynamics was in February 2018. 3 years ago, it was at the end of the previous BTC cycle.
The end of 2020 and the beginning of 2021 were the days when institutional investors entered the crypto market. The expectation was that it would stabilize the BTC market and make the price less volatile. And here we are "experiencing" the same emotions that early Bitcoiners experienced. This is like watching remakes of Disney's old movies. You can't help but wonder why they are doing this, and the only answer you can think of is "money". Is someone trying to bring the old ways of making a profit from BTC in a single day by capturing the market movement? This looks scary. If you are in this market, you need to follow the developments constantly. I recommend that you work with a stop in order not to live in the street.
I would also like to briefly mention the DOGE coin, which shows an increase despite the sharp drop in BTC and subcoins. The first of Doge's reasons for rising was the direct listing of Bitcoin and Coinbase on Nasdaq, which made the entire cryptocurrency market soar.
Then easyDN, a Canadian web hosting provider, announced that it will accept DOGE payments while accepting Bitcoin. BOTS, the robot company on the OTC list, made a similar announcement about Dogecoin. DOGE has seen a huge increase in its adoption recently, including Latvian airline airBaltic and Luxury hotel chain Kessler Group.
If you liked this post, please rate it and follow my page. Feel free to share your thoughts in the comment section.
It was an explanatory and beautiful article. I will continue to follow you.