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Of course, we are talking about bitcoin. And the whole cryptocurrency market. In the last newsletter we advised medium and long-term investors to look at the first cryptocurrency. It has fallen to attractive levels. And today we can already ask ourselves the following question. Has a low been reached from which the uptrend will continue.
BTC
There was no new “bad news” to push cryptocurrency holders into selling on Wednesday. However, there was a major collapse. BTC was down to $29,000 at one point. Many altcoins were down 2X in the moment compared to levels seen 24 hours ago.
The only reason for what happened is because of panic sell-offs related to margin-calls. It’s no secret that not only at forex brokers, but also at cryptocurrency exchanges, many use high leverage. So during Wednesday’s collapse, the exchanges closed positions of such traders at any price, only intensifying the downward movement.
All this is similar to what happened on March 13, 2020, when BTC collapsed two times in one day. It should be noted that this Wednesday’s drop was not as severe. But psychologically, the situation is similar. The heavens seem to have collapsed to the ground.
But there is one difference in those collapsed skies. The price of bitcoin now, even after the fall, is still 10 times higher than it was 14 months ago. Let’s remember what analysts were saying at the time. They argued that this was the complete end of the cryptocurrency market. Bitcoin would no longer be of interest to investors. What followed was a rise from $3,500 to $65,000.
It is now important to understand. Whether the $29000 level was a low or not. By the way, note that this is the price at which the first cryptocurrency closed trading on 31 December 2020. So, for all the panic, the price of BTC still refused to move lower.
One thing is certain. “Smart money” knocked a large amount of cryptocurrency out of the “weak hands” yesterday. And big investors built up their BTC holdings.
03.30 National Bank of China Interest Rate Decision
03.30 Australian unemployment rate for April
14.30 US initial jobless claims for the week
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