Greed Caused the Bitcoin Price 20% Plunge, Will BTC Price Rise Again?
The Bitcoin price suffered a massive correction with the BTC price falling from its recent high of $41,500 to an intraday low of $32,829, dragging the crypto market down with it. But what happened?
The cryptocurrency market has lost over $170 billion in total market value in the last 24 hours as the Bitcoin price fell below $33,000. The overall value of the crypto market is currently around $940 billion, down from $1.1 trillion yesterday.
At the time of writing, Bitcoin has already bounced significantly back to around $35,344, down still around than $6000 from its recent high of $41,500. The total market cap of Bitcoin is now around $660 billion.
The recent cryptocurrency market crash really began on Sunday in the US trading session when Bitcoin dropped from $39,000 to $35,000 within minutes. The world’s largest cryptocurrency recovered quickly to $37,500 but the Asian session added selling pressure on BTC. Blockchain tracking and analytics company Whale Alert reported a massive move earlier today when an unknown user transferred 3,875 BTC worth nearly $138 million to an unidentified wallet.
According to crypto analyst and investor Joesph Young, while many narratives are circling at what precisely caused Bitcoin to drop the answer is simple—greed.
"There will be many Bitcoin narratives—miners sold, dxy rose, whales sold, treasury is up, stocks are down, institutions sold. $2.7 billion was liquidated today. The simple answer is the market was overleveraged, got greedy, continue to buy first dips below $39k.”
Peter McCormack the host of podcast “What Bitcoin Did” also reminded his listeners on Twitter that the road to a $1 million BTC price is a long one filled with ups and downs.
McCormack wrote in response to online flack he had received from trader’s who had overleveraged their position:
#bitcoin has crashed and I’m poor!
Only because you ignored me and used leverage, blowing up an account, you dickhead.
These crashes happen, meh, the road to a $1m #bitcoin isn’t straight up. We shake a few hares out on the way.
Be a tortoise.”
Bitcoin Price Analysis
Source: BTC/USD TradingView
For now, after the 20% drop from its high, BTC found support near the 33000 level and found a decent rebound, currently trading at 35500. With the Fibonacci retracement, we can see that is now going to be some further resistance near the 37100 level and we need to pay attention to the Bitcoin price action if it gets there.
Source: BTC/USD TradingView
In the 4-hr chart, the price dropped drastically after the MACD dead cross, and it is important to pay attention to the next candle. We expect more optimistic price moves if this 4-hr candle manages to close in the green.
The William % R indicator is now located in the oversold region, which hasn’t happened since December 29, 2020. It suggests that we may have seen the short-term bottom and the Bitcoin price should either go up again or continue to consolidate sideways.
The Bitcoin price is currently $35,557 according to CoinMarketCap.
Image source: Shutterstock
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