The major cryptocurrency Bitcoin which has undergone a swift increase in the year 2019 — dropped 10% to 12% to about $11,450 on Thursday, according to coinmarketcap data.
Similar to a volcano that has passed through a period of sleep, the crypto market is displaying activity. This activity is signified by the volatility nature of the crypto market. The Bitcoin price managed to climb strongly from around $ 12,000 to just over $ 13,000 just to crash below $ 11,500 in the next few hours.
Bitcoin had touched a 15-month high above $13,000 just two weeks ago. It’s currently up about 200% after the start of the year, having found drive as large organizations like Facebook and Fidelity get included in the space.
What is the reason for the crash?
The same story occurred 2 weeks ago: Bitcoin had reached some $13800, then declined sharply to $10300, then to $9720. It again reached $13190 and now it is again declining.
The crypto market has received increased attention due to the rally of recent months. Many whales and those who entered the market. While there seemed to be only one direction until June 26, namely the one up, a strong correction of around 30% has caused disappointment. Since then, the market participants are not sure where the journey should go, the emotions build up and nervousness comes into play. Smallest uncertainties, false reports or misinterpretations can trigger hysterical waves and lead to heavy price swings.
The market is attempting to develop another powerful resistance that is currently established at $13200 and each time it gains momentum, grows to that level attempts to break it and when it doesn’t happen the fall comes.Price is not “falling” exactly, it is vacillating up and down in a secure channel between $10k and $13k each time this channel gets more uncomfortable too as earlier time we went as low as $9800 and this time only as low as $11,100.
It is likely that high speculators started to earn profits. This could create a wave of liquidation places. But this is one of the theories. In fact, there can be many reasons and it is entirely possible that this may be a collection of various circumstances. It is better to pay attention to the situation as a whole. While the market is bullish, and the data falls can be seen as an opportunity to join the market at a lower price.
Bitcoin is a volatile cryptocurrency so, it will actually fly a lot for a short period of time. The market is performing a reconstruction after a pump. It happens every time. Some traders earned profits after this pump and that may be the reason why the market is having changes.
What to do?
As an investor, you should always deal with the subject and understand what you are investing in. Blockchain is still at the inception and we will see a lot of change in this area. Projects will come and go. For the confident long-term investor, the situation should not be too worrying. Clearly, everyone is a little uneasy but this is often the rule in the crypto market rather than the exception.
Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The crypto market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.