$45bn flash crash.
It was business as usual again for Bitcoin and other leading cryptocurrency’s as the 1st day of December saw $45bn wiped off the value of the market before rebounding sharply in less than 4 hours.
Shortly after Bitcoin reached its all time high of $19,845 a flash crash on Tuesday morning saw the world’s largest cryptocurrency plunge to $18,300 in less than two hours taking the majority of the other leading crypto’s along for the ride. However in a good indicator of market sentiment low prices were quickly snapped up and many coins recovered well. A further smaller drawback happened later in the day and the price of Bitcoin currently stands at $19,078. Bitcoin and crypto are certainly living up to their volatile reputation.
Long positions take a hit.
There are many factors which may have contributed to this latest dip. Sunday and Monday evening were witness to both the weekly and monthly close respectively and each recorded significant gains. Therefore as Bitcoin hovered around its all time high many sell orders will have executed at around the same time resulting in the liquidation of many long positions. This may also account for the 20% pullback the market witnessed on 24th November when the price of bitcoin fell from $19,200 to $16,700 in 3 days. Prices have recovered since November 27th but today’s volatility shows that Bitcoin in particular just doesn’t want to pass that 20k mark.
However, it is not all doom and gloom. Crypto analysts are quick to point out that today’s V-shaped recovery demonstrates strength in buying sentiment as low prices were quickly bought up. Despite the sudden drop the data shows that sellers were unable to reverse the positive trend and the bullish outlook for the market remains. Data analysis supports the theory that traditionally sharp drops and quick recoveries often precede higher highs which means the $20,000 barrier may pass rather sooner than expected. However with the price of Bitcoin currently standing at $18,909 this price recovery may take a little while longer than many people would like and expect to see.