Bitcoin’s Bloody Sunday Has Weeded Out the Weakl
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Posted On: 07/19/2017 5:21:49 PM
Bitcoin’s Bloody Sunday Has Weeded Out the Weaklings
If you believe the stock market’s regular hours from 9:30 am to 4 pm on Monday to Friday are exhausting, just wait until you find out cryptocurrency markets are open for trading 24/7/365. Because cryptocurrency volatility can arrive at random hours, fortunes are made or lost while you sleep or while cheering on your 10-year-old’s Saturday morning soccer game.
As such, the most recent bloodbath in crypto-land was served up shortly before Sunday brunch, as Bitcoin plummeted 10% to $1,851 around 9:00 am EST. That climactic drop followed three days of selling which knocked the price down a staggering 25% since Thursday, as investors received the not-so-subtle reminder that what goes up must come down.
Here’s the good news: By the time brunch ended, cryptocurrencies had largely reversed their morning selloff. If you were paying the bill in Bitcoin, breakfast was only about 5% more expensive than when you sat down. And if you were busy attending to your avocado toast and (fortunately) missed the panic selling, a key reversal pattern occurred which suggests higher prices for the cryptocurrency in the days and weeks ahead.
Put simply, the price level that served as “resistance” in May is now “support,” as the previously failed breakout around $1,850 now serves as a price point where buyers are willing to defend the plummeting price of Bitcoin. Additionally, the accompanying surge in volume on the drop and rebound confirmed this notion.
In total, last month’s short-term Bitcoin bear market witnessed an approximate peak-to-trough drawdown of 38% (also a key Fibonacci retracement level), at a time when investors thought Bitcoin was infallible.
A little over a month ago, everybody wanted a piece of this shiny new digital asset as Bitcoin’s price flirted with $3,000 and its image graced the covers of major financial trade publications. In late May, Google Search trends for “Bitcoin” went through the roof, as investors scoured the web trying to understand and buy Bitcoin at the same time. A price top followed shortly thereafter.
This mini-mania turned into a mini-panic as Bitcoin went from a “store of value” to a “destroyer of value” in a matter of weeks.
In the past month, the price action looks like a bungee jump with the jumper getting closer to the ground with each successive plunge and bounce. One defining characteristic of bear markets is that they bounce up as fast as they go down, and so far, Bitcoin’s has followed suit.
The Bottom Line
Sunday’s reversal was a classic signal that weak hands who had bought the top were flushed out and longer-term buyers appeared. While volatility is sure to continue, this reversal suggests a medium-term bottom for Bitcoin in the days and weeks ahead.
If you believe the stock market’s regular hours from 9:30 am to 4 pm on Monday to Friday are exhausting, just wait until you find out cryptocurrency markets are open for trading 24/7/365. Because cryptocurrency volatility can arrive at random hours, fortunes are made or lost while you sleep or while cheering on your 10-year-old’s Saturday morning soccer game.
As such, the most recent bloodbath in crypto-land was served up shortly before Sunday brunch, as Bitcoin plummeted 10% to $1,851 around 9:00 am EST. That climactic drop followed three days of selling which knocked the price down a staggering 25% since Thursday, as investors received the not-so-subtle reminder that what goes up must come down.
Here’s the good news: By the time brunch ended, cryptocurrencies had largely reversed their morning selloff. If you were paying the bill in Bitcoin, breakfast was only about 5% more expensive than when you sat down. And if you were busy attending to your avocado toast and (fortunately) missed the panic selling, a key reversal pattern occurred which suggests higher prices for the cryptocurrency in the days and weeks ahead.
Put simply, the price level that served as “resistance” in May is now “support,” as the previously failed breakout around $1,850 now serves as a price point where buyers are willing to defend the plummeting price of Bitcoin. Additionally, the accompanying surge in volume on the drop and rebound confirmed this notion.
In total, last month’s short-term Bitcoin bear market witnessed an approximate peak-to-trough drawdown of 38% (also a key Fibonacci retracement level), at a time when investors thought Bitcoin was infallible.
A little over a month ago, everybody wanted a piece of this shiny new digital asset as Bitcoin’s price flirted with $3,000 and its image graced the covers of major financial trade publications. In late May, Google Search trends for “Bitcoin” went through the roof, as investors scoured the web trying to understand and buy Bitcoin at the same time. A price top followed shortly thereafter.
This mini-mania turned into a mini-panic as Bitcoin went from a “store of value” to a “destroyer of value” in a matter of weeks.
In the past month, the price action looks like a bungee jump with the jumper getting closer to the ground with each successive plunge and bounce. One defining characteristic of bear markets is that they bounce up as fast as they go down, and so far, Bitcoin’s has followed suit.
The Bottom Line
Sunday’s reversal was a classic signal that weak hands who had bought the top were flushed out and longer-term buyers appeared. While volatility is sure to continue, this reversal suggests a medium-term bottom for Bitcoin in the days and weeks ahead.
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'Everything works out in the end,,,If it hasn't worked out,,it's not the end'
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