The mainstream media LOVES to boast regular market events and turn them into clickbait articles. This has been the case lately with Bitcoin, which saw in the previous weeks a massive price hike. It is very normal to witness a price correction along the way, and that’s when low-end news websites start bombarding readers with “THE CRASH IS HERE” and “WE TOLD YOU SO” articles.
That’s why it is very important to only trust high-caliber news sources such as CryptoTicker, giving detailed information and data around each subject we delve into. In this article, we will take a closer look at what happened so far with the price of Bitcoin, when to ACTUALLY take stop-loss measures and ACTUALLY call it a crash.
Bitcoin Price – The REAL Story so far
Ever since December 16th 2020, Bitcoin managed to break the USD 20,000 price barrier, an event highly anticipated by Bitcoin enthusiasts everywhere in the world. The price did not stop there though and continued upwards to establish a strong support area around USD 22,500 (tested 5 times).
Around Christmas, the price kept showing strength and established a new strong support area around USD 26,200 (tested 3 times). On the 2nd of January 2021, Bitcoin price jumped above the USD 30,000 price mark recording a new all-time high and reached USD 34,700.
Bitcoin Price Prediction – Stopping the HYPE
In order to correctly know if the price of something is crashing, we need to first know the true definition of the word “Crash” for financial markets:
A stock market crash is when a market index drops severely in a day, or a few days, of trading. A crash is more sudden than a stock market correction, which is when the market falls 10% from its 52-week high over days, weeks, or even months.
In the above definition, it is clear that crashes differ from market corrections. For the equity market, it is a sudden drop of more than 10% that can stay for days or weeks.
It is well known that the cryptocurrency market is more volatile than the equity market, hence a 10% drop is nothing compared to the 30% increase Bitcoin made during that same timeframe (figure 2).
When Bitcoin’s price adjusted 10%, the mainstream media went NUTS and started touting a crash. Looking at figure 2, it was merely a correction that followed the 50% Fibonacci retracement.
We’re not saying that a cryptocurrency market crash will never happen, rather we’re pointing out that so far, there are no crashes, unlike what’s being touted in the market. For a crash to happen, prices would break within a day or two the support levels of USD 26,200 and USD 22,500 shown in figure 1.
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Rudy Fares
