If you thought the Bitcoin bloodbath ended yesterday… boy, were you wrong!
On Monday, Bitcoin registered what was then the sharpest gross drop in its history in terms of dollar amounts. In a matter of hours, the price of Bitcoin went from just over $57,500 to bottoming at $46,700. But a bullish effort from traders saw its price rebound, and the candle closed at $54,142.
And just when Bitcoin investors were starting to talk about a market recovery, the real flash crash happened.
Yesterday, crypto analysts were admiring (if you can call it that) Bitcoin’s daily red candle wick—that is, the minimum point reached before reversing the trend during the day. But today, the market is faced with the largest red-bodied candle in Bitcoin’s history. Starting the day at $54,100, BTC only managed to reach $54,200 for a few minutes before plummeting to its current price of just above $48,000.
The dip cut Bitcoin’s market cap down by nearly $100 billion, from above a historic $1 trillion to now just above $900 billion.
Its daily minimum came in at $44,880, just off a slight support zone marked by a correction after the price spike following Tesla’s announcements in early February 2020. At the time, Elon Musk’s electric car company revealed a new corporate strategy to the SEC, buying $1.5 billion worth of BTC, and announcing that it was working on accepting Bitcoin payments.
Bitcoin has been in price discovery mode since it first broke the $20,000 price zone—the previous all-time high registered in 2017. Price discovery happens when an asset breaks its all-time high and then maintains a bullish trend. It is called “price discovery” because traders have no previous experience buying and selling above that specific price.
And despite the drop over the last two days, Bitcoin has been on an epic bull run, exceeding the expectations of even the most experienced analysts. Some were even expecting a short-term sell off. Real Vision founder Raoul Pal, for example, shared his relief follow yesterday’s market correction:
It it just me that feels relief when the BTC sell offs come? You know they are coming but when they finally arrive you can switch into buy the dip mode. March is a historically weak month. Not sure if this is the bigger March correction of just another cheeky shakeout . pic.twitter.com/GMH7evctX5
— Raoul Pal (@RaoulGMI) February 22, 2021
Still, some market observers may be surprised to see that even Square’s bullish news—that it has invested another $170 million of corporate funds in Bitcoin—hasn’t been enough (yet) to reignite the rally.
For the time being, it may not be a bad idea to consider removing those laser eyes from your Twitter profiles.