In possibly one of the most shocking turns if events we have experienced this year(more shocking than the 10k rally), BTC lost about 4% of its weight, travelling down from it's 10k high horse all the way back down to 9.7k.
And all the pro traders I knew called this move. ALL of them.
So why did it happen? And is it a good thing? And should we be worried?
I have answers here!
So let's take it question by question:
1. Why did it happen?
Bitcoin jumped from the 9.8k mark, all the way to 10.13k without any corrections whatsoever. The market isn't that lenient, and this was bound to happen.
Bitcoin's strong and seemingly unstoppable uptrend stopped somewhere along the 61.8% Fib retracement level. The correction phase had begun.
In less than 20 minutes, BTC shed 4% of its weight, plummeting right back to the closest support.
Bulls immediately tried to get BTC back to its high horses, and bid higher prices, which explains the green candle that came after the extremely bearish one.
But the bears were way too strong, and as at the time I'm writing this, BTC is down to 9.7k once again.
Has another downtrend begun?
This segways me to my next question:
Is it a good thing?
Well, yes and no.
This flash crash is a good thing for those who short sell, and bet on that price action.
But more importantly, it's a good thing for anyone involved in the Bitcoin market. This correction and a bounce off the very strong support line means that Bitcoin will reach a new high very soon, probably by next week even.
This pullback is necessary if Bitcoin wants to jump parabolic soon. And the fact that this pullback occured at the extremely important 38.2% Fib level is all the extra reason to be even more bullish.
So why is it a bad thing?
Simply because of the fact that over $100 million dollars in short sell orders was liquidated by that unforseen move. Short sellers anticipated this move, but didn't anticipate it going that far down. And $100 million is a lot of money.
Unless fresh Bitcoin falls in, we can expect this bear market to last for about 3 more days, before a new high is formed.
As always, thanks for reading, and remember that this isn't financial advice!