At this writing, Bitcoin (BTC) is continuing to fall after its dramatic decline over the past two days. The price is holding at 8700 after taking a dive from 10,500 just 10 days ago.
Traders Freak After Rejection at 10.5
When Bitcoin was unable to break the 10,500-price level and was twice rejected market participants begin to sell to book profits. On February 20th traders thought that the sellers had been cleared out of the markets as price held steady at 9500 and then hesitant buyers returned to the markets pushing prices back to the 10k level but could not push past. At this point the bears took over and have not eased up all week.
The Reasons Why
There are many guru’s and analysts trying to come up with reasons and explanations for the decline and the change over to a bearish market. Most agree that the next big event with be the Halvening which has historically send prices soaring. Many big players figure that they will book profits now and then buy at the bottom to sit out the market until the early May event.
Virus Worries
The Coronavirus has global markets on edge and many Bitcoin enthusiasts said the rise in prices was that of a safe haven, as Bitcoin replicated golds rally twice this year. In January after the US assassinated an Iranian General and global tensions rose safe havens rallied as markets moved to risk off trading.
All the headlines were exclaiming that Bitcoin was now a safe haven asset. Earlier this month, as worries about the effects of the virus took hold and Bitcoin rallied, the same enthusiasts proclaimed loud and clear that Bitcoin was now a safe haven.
The digital currency price continued to rally. The problem here is over the past few days global worries about the effects of the virus on the financial markets, stock exchanges plummeted and gold continue to rally while Bitcoin took a nosedive discrediting the theory.
Risk Off Mode
Amid global coronavirus tensions, traditional markets are also in turmoil with major indices such as the S&P500 and Dow Jones Industrial down more than 7 percent on the week.
Major Sell Off
Yesterday, the massive shift in the markets added to the price collapse. The markets saw more than $190 million work of liquidation on the BitMEX exchange alone. Trading volume is the value of the underlying asset in the derivatives market. It can be the total value of a position, how much value a position controls, or an agreed-upon amount in a contract. When there is a large amount of volume on a downward price, that generally signals the movement as a legitimately bearish move.
Other Coins
Nearly all crypto assets fell yesterday, leading to bitcoin’s safe-haven status being questioned in the community, a fresh wave of selling again hit the market on Wednesday and continued on Thursday morning. This time, it’s the altcoins that are taking the worst hit. Despite the recent selling, which has led to a short-term correction, many analysts remain optimistic about bitcoin’s prospects over the mid to long-term. Although price is exhibiting bearish characteristics and if there isn’t a price bounce today, the bears will become dominant.