The BloodBath in the Crypto Market

Ohkay, let's talk about what happened in the market a day ago. The market was red and no one actually expected such manipulation in the prices of crypto assets. Even following historical trading data proved abortive as it went beyond the imaginable. This caused a lot of sell pressure in the Crypto ecosystem and lots of lost hopes that crypto will ever bounce back. The people says that the bull run has done what it supposed to do and is done.

I actually expected such dip but didn't expect bitcoin will drop by $5000 from $55k. This is what is called in the market bear trap. The market was just so bad for spotters and longers as they lost funds as a result of holding. To the shorters, lot of money was made in the market following the downward movement of bitcoin. It was the first time since I started crypto trading that I saw such dip of $20% loss from bitcoin. Some people may wonder what caused this. These are reasons for the dump.

Bitcoin dropped from $70k to $48k. Just imagine. I did sell my positions to manage my risk and prevent losses when I saw the signs using historical data and waited for the dip which happened unexpectedly. This was a general case in the whole stock markets because of some negative news flying around in countries were crypto whales and huge Investors dwells. Asides these negative news in the market, the manipulation was clearly seen as well.

Jack Mallers from Strike reminds us that we are living in a crisis period and during such crises, the markets sell what they can, not what they want.

"Bitcoin is down because it was the only market open to sell on Sunday night and this was as a result of the sell pressure, pulling the legs of bitcoin price. This was one of the reasons and not because the only fixed supply money we have is now less valuable."

Indeed, after the opening of U.S. stock markets, Bitcoin’s decline stopped which was seen early hours of the morning and it even saw a slight increase (moving the price of Bitcoin from $48k to $54600), despite previous speculation that once the markets opened for trading, Bitcoin ETF holders would rush to sell their assets and drive the price down further. This made most people assume that bitcoin may reach $30k because of the drop in price.

Popular technical analyst TechDev overlaid an 8-week Bitcoin chart onto the well-known global market adoption curve, which prominently features a very deep "bear trap." This is portrayed in the picture shown below. So after this trap in the market, we'll be experiencing a surge up till December. Renewed Optimism," FOMO, and euphoria

This historical data works differently as to the time but portraying the same price movement. As of September, 2021, bitcoin experienced this bear trap as it fell from $50k to $39k then it experienced a slight surge as of September, 2024 and this happened some days back this August as bitcoin dropped from $70k to $49k.

Still that month, bitcoin did a correction in price from $39k to $44k. Same Is happening in the market as bitcoin has surged it way to $56k as. Shown in the screenshots. I don't think we'll be experiencing any major dump in the market again. So if I'm to advise, I'll say you place bitcoin on longs and then position yourself in a way that they'll be enough space against liquidation e.g placing liquidation to $20k which is actually impossible for bitcoin to reach at this stage during this cycle.

Sreenshots are from my binance app and twitter account.

Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have