The Bitcoin price index fell sharply after scaling the long-term resistance of $10,000 earlier today. The move resulted in the cryptocurrency being forced back into the sub $9000 levels in a few minutes thus canceling out the immediate bullish setup. The move eventually resulted in a deeper drop below as low as $8700 before the cryptocurrency recovered back to $9500 as of press time.
As a result of this sudden drop, many shorts were executed especially the stop orders and that triggered a deeper pullback that many weren’t expecting to occur so suddenly. In BitMEX alone, more than $100 million were wiped out from the market valuation of the cryptocurrency and derivatives trading.
The move bamboozled many investors and once again, the market is back in the narrow trading range of $9500-$9800, the same way it has been for many weeks till now. For many traders with stop trades on, it was a deeply problematic pullback and once again, questions are being raised regarding the short-term future of the cryptocurrency.
Image source: coinmarketcap.com
While many traders including Dave predicted a price pullback, no analyst could predict this sudden drop that came out of nowhere and trapped sellers probably on the wrong side of the market. This enormous sell pressure is usually caused by a coordinated attempt by some of the sellers on the market to profit from the movement and indeed many did too.
What is further interesting to note is that many millionaire trades were made above the $10,000 value just before this drop. A 3500 BTC transaction on one of the top exchanges around $10,100 showed that the cryptocurrency was bullish and investors were flocking in, including some wealthier ones. However, the price index took a hit and the confidence on the cryptocurrency for short-term trades will be lower than before.
HODLers however were unfazed by the latest price drop and have ridden in back to around the same levels as before. Due to drops like these, the second most recent one that occurred on March 12, 2020, more and more cryptocurrency enthusiasts are looking at HODLing as the right way to own and transact cryptocurrency. Short-term markets often cause problems and unnatural swings that trap traders.
Bitcoin Futures, especially on BitMEX took a deep hit. The futures market dropped from 70,000 BTC to 57,000 BTC in no time. It is also being analyzed whether the drop was orchestrated from within the futures market too as it has become another indicator within the community.
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