Bitcoin Crashes 10% To $7,000 After Analysts Called For A Pullback
Volatility is back, that’s for sure. In the past 20 minutes, Bitcoin (BTC) has slipped at $7,800, wicking to $6,600 on Bitstamp as a result. It is rumored that this sell-off was a result of a massive sell order placed on Bitstamp, as made evident by the fact that during this dump, there has been an over $500 gap between its price, and that seen on BitMEX, Coinbase, and other major exchanges.
As of the time of writing, the crypto asset is trading at $7,100, and continues to move minute-to-minute, implying immense volatility.
This has only been corroborated that there have been colossal sell walls seen on Bitstamp, hinting that there is one entity or group of traders, likely based in Asia, that are looking to suppress the price. In fact, one commentator on Twitter quipped that such a move was catalyzed to try and liquidate BitMEX longs, which have been stacking up as Bitcoin has held around $8,000 for days on end.
Data would confirm that this move worked. According to Bitfinex’ed, a popular crypto “cynic”, $250 million worth of longs were liquidated on the exchange over the past hour. In other words, those optimistic have just been pummeled.
Two hundred and fifty million dollars in liquidated longs on Bitmex. pic.twitter.com/Nncar5KC6Y— Bitfinex’ed (@Bitfinexed) May 17, 2019
Analysts Have Warned Bitcoin Investors
Interestingly, analysts have been warning about such a move for days on end, looking to simple technicals to make a clear point. On Thursday, popular analyst Filb Filb noted that the cryptocurrency market had topped… for now anyway.
He notes that the long-short ratio on Bitfinex has been nuked, dramatically reducing the chances of a short squeeze, which would pressure Bitcoin higher. Whats more, bid support (buy support) is decreasing hour-over-hour, the parabola that BTC has traced for the past few months is shaky, and there is decreasing volume in this embryonic market, all signs which arent too reassuring.
Filb expects for Bitcoin to retrace to the 0.618 (61.8%) Fibonacci retracement at around $5,200 which he believes could be the last place to accumulate BTC, potentially ever. He isnt the first to have suggested that a drawdown was inbound.
Josh Olszewicz of Brave New Coin pointed out that Bitcoins chart is screaming for a pullback to below $7,000. He looks to the fact that the Ichimoku Cloud, a collection of indicators used to discern trends, momentum, and key levels, is currently showing that BTC is overextended. And guess what, we reached sub-$7,000 levels, before quickly bouncing higher.
Featured Image from Shutterstock. Charts Courtesy of TradingView.
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