The world’s number one cryptocurrency by market capitalization has had another trying week as bears took control of the market, leading the coin to lose about $1,000 of its value in several days. Like we previously wrote, there was an increase in selling pressure around Wednesday that culminated in a big price drop at the start of this week. Current signals from the market suggest that the price correction may not be over as bears still have the upper hand.
As the Independent reports, Bitcoin’s latest price drop put a sharp halt to a record rally that doubled the coin’s price this May. In just a single hour last week, Bitcoin shed about $700 of its USD price, causing other cryptocurrencies to follow suit and likewise experience significant losses. In the same day, both Ripple and Ethereum dropped 7% of their value, raising doubts about the crypto market’s predicted success this year.
Nevertheless, Bitcoin’s current price is still well above the range it traded in at the start of last month, with many predicting a recovery and a strong rally just like in 2017. Adding validity to these predictions is the increased interest in online searches for cryptocurrencies which reportedly hit an 18-month peak last week, as new countries like South Africa and Ghana joined the global crypto craze.
Market Is Still Pro-Sell
During the previous week, Bitcoin’s value experienced a sudden drop that was most probably caused by traders looking for profit after the latest price increases. The highest price point the coin reached during this period happened last Thursday, when Bitcoin touched a value of $8,994.80, while the lowest point was hit yesterday evening, when one coin briefly sold for $7,605.68. The trading volume remained consistently between $20-25 billion throughout the week and reached $23 billion today. The market cap, on the other hand, has naturally dropped since then and is now at $138 billion.
As our technical analysis shows, Bitcoin is yet to break away from the bearish mood that began forming at the middle of last week. As of now, 6 out of 12 technical oscillators and 11 out of 12 moving averages are pro-sell, showing us that bears dominate the market. The SMA 100 has also dropped below the SMA 200, indicating there is less resistance to the downward course. With similar signals coming from the short-term charts, we can conclude that Bitcoin is headed for a test of $7,600, which if broken could lead to a new drop.
Bitcoin Whale Leads Price Drop
According to Forbes magazine, the recent price correction was most likely caused by another Bitcoin whale looking for a quick profit after the surge. As reported by a contributor at Forbes, a large stack of Bitcoins worth over $200 million was traded on Monday, with the anonymous seller possibly earning millions in the process without losing their coins whatsoever. Unfortunately, the trade also led to a slide in BTC/USD price.
The trade began when 25,000 coins were moved from a wallet to the Coinbase exchange. This was followed by two different trades that saw 14,000 BTC and 11,000 BTC moved from Coinbase to another wallet. At the time of the sale, the original coin stack was worth around $215 million while when it was bought later, the same amount of coins was worth $200 million. If it was executed by the same person, it means that that individual made around $15 million in a short time while still retaining the same amount of coins they started with. Talk about smart trading, right?