Bitcoin Plunges to $12,400
No, Bitcoin bulls are not back in control, Bloomberg. In the past two hours, the leading cryptocurrency has shed a large portion of its week-to-date gains, falling to $12,200 as of the time of writing this.
It still isn’t clear what triggered this flash collapse, which comes shortly after BTC breached $13,000 and was poised to close some important short-term candles strong.
With Bitcoin down nearly $1,000 in minutes, what exactly is next for the cryptocurrency? Well, no one is actually 100% sure. And no one should be.
But, there are some theories currently being floated, which are rather preliminary and rudimentary in form due to the recency of the rapid Bitcoin flash crash. Analyst Crypto Birb points out that this sell-off candle looks much like the one on July 5th. What followed was two to three days of solid consolidation and ranging, then a breakout to the upside that led to BTC recently tapping $13,000. Considering that markets cannot go vertical, even cryptocurrency, another round of consolidation is entirely possible.
Others have simply stated that this is Bitcoin simply establishing a range, meaning that this drop shouldn’t be anything to write home about. Indeed, over the past three to four months, BTC has been subject to bouts of immense volatility, which have only been followed by more upside for those that are patient. As Alex Kruger quipped in a recent tweet, “in a bull market, market crashes are for buying.”
It is important to accentuate that this drop does not put Bitcoin back into bear territory, despite what some cynics and sensationalists may think. There are still a number of technical signs that show that BTC is surely in a bull market, not anything else.
As pointed out by analyst CL207, a little-known yet astute cryptocurrency commentator, BTC recently crossed above the 1.25 standard deviations above the 50-week simple moving average line.
This, per the historical chart seen below, has accurately predicted two previous parabolic bull runs and subsequent bearish sell-offs. So, if history is of any indication, Bitcoin’s foray past $10,000 may just be the early stages of a larger uptrend, which some analysts say will bring BTC to $100,000 and beyond in the coming two years.
Even more convincing is the fact that the Super Guppy, an all-encompassing technical indicator that predicts trends, has flipped from red to green on Bitcoin’s three-day and one-week charts.
Title Image Courtesy of Andre Francois Mckenzie