Bitcoin’s second price crash of the week has sent a wave of nerves rippling over the cryptocurrency markets with red screens across the board this morning.
After tumbling from an all-time-high $58,371 to around $52,150 at the start of the week, signs of recovery were beginning to suggest BTC was entering a temporary dip as it began to test $55,000 again by Tuesday evening.
Wednesday, however, saw a steady decline as the original cryptocurrency slipped back under the important psychological level of $50,000 and looked – to all intents and purposes – like the market wanted to settle along the $48,000 line. This notion was reflected yesterday as BTC bounced between $47,000 and $49,000 in what appeared to be a clear indication of being drawn into a long stint at $48k.
As is often the case in the volatile world of cryptocurrency, BTC had other ideas, and traders woke to find Bitcoin had plummeted below $45,000 – even dropping a brief scarlet wick under $44k.
It wasn’t entirely a sea of red, though. A bright green lifeboat in the shape of Cardano’s impressive native token ADA – once again showing its mettle against a strong negative current – was on the rise and climbing at more than dollar.
ADA aside, Bitcoin’s dramatic price shift this week has set alarms bells ringing across investors and traders – many no doubt still finding discarded Champagne corks from the weekend’s celebrations of punching through $58,000.
Reflecting over a week of charts and movements, it would appear that fears of BTC overstretching itself in a furious bid to hit a landmark high have rung true. Support levels became gossamer-thin and the price has slipped, unchecked by falling volume.
Experienced and well-respected crypto analyst Mati Greenspan – founder of Quantum Economics – believes Bitcoin may have simply got ahead of itself.
“It got overheated,” he told City AM today.
“People got carried away – now we see a mix of liquidations and profit-taking.”
The market is already beginning to show the predicted liquidations and profit grabs. This morning has signalled some buying momentum as investors look to capitalise on the dip.
A note of caution awaits, though. Weekend trading has, historically, often been weak and largely registered declines over the years.
Whatever happens to Bitcoin over the next few days depends entirely on what side of the bed the US crypto traders get up from later today. By mid-afternoon, the big players in California will no doubt have the final say on which direction the crypto compass will point as we cap off the end of an exciting week in markets.