Bitcoin Hit an All Time High! Then Collapsed (Taking the Market w/ it), Here’s Why We’re Not Worried… | Web3 Daily

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Bitcoin hit a brand new all time excessive of $69,093.28 (hoooray)!

Then promptly collapsed again right down to $59,323.90, taking the remainder of the market with it (booo)!

Right here’s our left-curve try at ‘mid-curving’ it, with a guess at what occurred:

The longs took earnings, whereas the shorts loaded up.

(Have a look at us, speaking the mid-curve speak).

Right here’s what which means:

Longs taking earnings = the oldsters that had been betting BTC’s worth would go up determined to promote.

Shorts loading up = an entire bunch of parents took bets that the value would go down — by: borrowing BTC → promoting it → and ready/hoping to purchase it again at decrease costs → repay their mortgage and preserve the distinction.

“Cool cool cool. However how is it that all of them determined to take action on the identical time?”

Merchants wish to bolster their choices, by searching for repeating chart patterns.

(I.e “BTC has finished X round this worth level up to now, so there’s Y% probability it’ll occur once more.”) 

However as soon as BTC broke its all time excessive, we have been in uncharted territory (with no patterns to maintain merchants protected n’ heat) — so, lots of these with lengthy positions would’ve offered off at $69k.

Then, understanding that this might doubtless be a broadly held apply…

A lot of those self same merchants would’ve arrange computerized brief gross sales to set off on the identical worth level — resulting in a double whammy of lengthy/brief gross sales which (nearly instantly) tanked the value.

As to why we’re not apprehensive?

In February, Bitcoin noticed probably the most worth appreciation in a single month in its complete historical past. That’s a WILDLY violent new report for a ~$1T asset to set.

At these charges, a worth correction was properly over due (and when it rebounds — the remainder of the market will doubtless observe).