In the past few days, looking at your portfolio was probably painful. That’s because Bitcoin dropped from 63k at the start of the month to 53k, which is a crazy dip. Let’s explain why it happened in this article.
The Market
In a few hours, the market liquidated a lot of positions. We can see the power of the movement with this tweet :
Source : Twitter (X)
That’s crazy ! You can imagine the panic for everyone, with a lot of FUD in the crypto community telling everyone that this is not the end. With fewer and fewer people telling you to buy more, we can feel the end of this bearish movement.
But for people who are new to this market and have only known the start of this bull run, we can understand that it’s frightening. With more than 800 billion dollars leaving the market since the all-time high in March, that hurts.
The Reasons Why
A few days ago, I talked to you about Mt Gox, an exchange that was hacked, losing a lot of Bitcoin (141,687) and plans to redistribute them to the customers affected. The wallet that holds those Bitcoins can be tracked, so each movement frightens investors.
Furthermore, the German government, which holds $2.28B worth of Bitcoin, started selling a lot of those Bitcoins at the start of the month. Plus, the US government also sold a lot of their Bitcoins:
Source : Lookchain on Twitter (X)
We can also talk about the FED, which is unlikely to cut interest rates three times this year due to the good statistics about the US economy.
Conclusion
All of these factors combined made the price dump, triggering a long squeeze that pushed the price further down. In my case, I’ve invested a good amount of my stablecoins, I still believe that it’s the perfect time to continue buying.
As always thank you for reading !
My favorite Crypto Faucet : Cointiply (referral)
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Disclaimer : This is not a financial advice, you need to do your own research !
