Hello my fellow bloggers! The drop in price we saw on previous weekend was quite surprising. We all know BTC is a highly volatile asset, yet we this time we saw something extraordinary and here is why.
Source
BTC price never was stable. We see the red days almost as often as green ones even on a bull market. The change in price for 1-2% in a single day is an extraordinary event for S&P, but is nothing for Bitcoin. When you zoom out to a monthly chart BTC looks much more stable. You clearly see the trend. From the first look, 15% drop on the previous weekend doesn’t look any special. A good portion of FUD mixed with hash rate drop resulted in certain market move and triggered automatic sell offs and liquidations. In any BTC bullrun in the past we saw price deeps of 20-30%. It is usually a healthy correction. Taking into account BTC was in a green zone for too long, many experts expected something like this. Yet as always devil hides in details.
Correction for 15% is expected. Drop for 15% in a single day is something that we haven’t seen since early days of the market. When I started to search for largest daily drops of BTC price, I found this table:
As you can see, BTC drop for more than 15% in a single day happened many times before. The key issue it mostly happened in early days! BTC price was tiny fraction of the current one. The market was small and highly volatile. With market growing in size, such events became rare. If you exclude March 2020 drop caused by global pandemic, then the last drop caused by market dynamics was in Feb 2018. It was 3 years ago at the very end of the previous BTC cycle.
End of 2020 and beginning 2021 were the days of institutional investors entering crypto market. The expectation was it will stabilize BTC market, make the price less volatile. And here we are, “enjoying” the same feelings early bitcoiners had experienced. This is like watching Disney remakes of their old movies. You can’t stop wonder why they are doing this and the only answer coming to your mind is “money”. Does someone tries to bring the old ways to profit from BTC in a single day by catching market move? This looks scary.
Disclaimer
I’m not a financial of any kind. I encourage you to check all information yourself and make decision only based on your own opinion. All articles are created for solely entertainment purpose.
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With crypto nothing is normal, just as the bicvoin fell, the doge, which is an insignificant coin and is given away for free in many faucets, rises. To predict that this will still be a trend is daring as it is to say that it will rise in a moment. The higher it goes the harder it will fall, certainly, but everything will depend on those who want to invest and those who want to take part of their profits. @tipu curate 2
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Who can truly predict the market, one moment it's up and the other it's running down. We just have to watch for the right time . Nice read