It seems that only yesterday Bitcoin was inching towards $3000 and a new all time high was incoming. However, as the beginning of the week hit, Bitcoin’s price drastically crashed over $400 in a matter of hours, signifying a 15% drop in price setting back traders a few weeks.
While such a dramatic drop is never good, it is important to keep it in perspective. It was only two weeks ago that the price was at $2500, meaning recovery is not unlikely. Along with Bitcoin, Ethereum crashed as well after briefly touching $420 on many exchanges. Such a correction was imminent for both cryptocurrencies because their price has diverted too far from any technical analysis indicators.
It is speculated that Okcoin’s liquidation of long positions attributed to the negative market pressure. According to @WhaleCalls – a bot powered bitcoin market reporter – the exchange liquidated thousands of positions at the price of roughly $2500.
Okcoin $BTCUSD Quarterly futures has liquidated a long position of 2902 contract at 2,537.50 – 2017-06-13 01:34:38
— WhaleCalls (@whalecalls) June 12, 2017
This isn’t the first or the last time that Okcoin’s liquidation has caused massive movements in the market, that is an inherent problem with margin trading, as at some point the liquidations hit and create unsustainable pressure on the market, causing it to correct.
There have been no recent negative news which should be a cause for a panic sell, meaning that the current price action just seems like a product of traders’ speculation. China and Japan are still buying Bitcoin like crazy and we can see that because of the existing premium in coin prices.
Furthermore, according to reports on r/BitcoinMarkets, there have been massive sell walls at $3,000 signaling price suppression. For whatever reasonsr there are forces out there that don’t want Bitcoin’s price to rise even further, the reason for that is still unclear. Some may speculate that traders are suppressing Bitcoin’s price in order to fuel Ethereum’s rise even further. After all, as Ethereum inched towards $400, its market cap also inched towards that of Bitcoin. Rest assured if Ethereum surpasses Bitcoin is market cap, many traders will take altcoins much more seriously and the flippening may happen sooner than you think.
Dislaimer: This is not trading advice, this article is for educational purposes only. If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.