Bitcoin price drops by 15% today, What comes next?
Bitcoin was trading at $50,984$ in early trading hours on Sunday, down 15.62% on the day. It was the largest one-day percentage loss since Thursday, January 21, 2021.
The move downwards pushed Bitcoin’s market cap down to $1T, or 50% of the total cryptocurrency market cap. At its highest, Bitcoin’s market cap was $1.049T.
Bitcoin backed up quickly from its low, and currently trading above 55000$, registering 10% growth from the today’s low.
Key Reasons
- The Bitcoin Hash Rate was down 40% today, as a result of the Xinjiang blackout. One province in China represents a significant share of the Bitcoin network. Price follows hash rate most of the time, so it could be the key reason for this drop.
- According to rumors, U.S. Treasury is planning to charge several financial institutions for money laundering using cryptocurrencies.
- Coinbase insiders dump nearly $5 billion in COIN stock shortly after listing.
What happens next?
Bitcoin was trading in an uptrend channel formed on a Daily timeframe before the price took a nosedive. Bitcoin has lost the key support of this channel as of now, but it would be interesting to see if bitcoin can regain the support, and close the price above 58000$ after the day closes.
In Short, Bitcoin remains bullish as long it stays above the uptrend channel by reclaiming 58000$ as daily support, if the price fails to reclaim this support then we could see more down moves in near future. Be prepared for that as well.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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