Why is bitcoin crashing and what’s happening to the crypto market? These are the biggest questions of the moment, with a lot of traders and investors panicking for this new Bitcoin price drop.
The crypto market continued it’s multi-day slide on Wednesday with double digit losses posted for the majority of the day on Bitcoin and every other asset in the Top 30.
Actually at -12.17% for the last 24 hours at the time of writing, BTC is the best performing asset in the Top 30 cryptocurrencies by market capitalization.
BTC however is the culprit for the downward spiral which caused another $300 billion to exit the aggregate crypto market capitalization today.
Bitcoin’s Biggest Dip Since March 2020
The BTC price suffered a massive pullback early Wednesday morning after suffering capitulation on many of the previous ten days. The price dropped 29.82% and finally found support at $30,415 according to CoinGecko’s data but some exchanges and market cap sites had BTC as low as $29k.
Many exchanges around the world went down during the peak of the sell-off and the typical theories were again abound on social media about whether these outages were the result of network overload or exchanges pulling the plug to minimize heavy volume outflows.
Wednesday’s 24 hour BTC LOW was $30,415 and HIGH was $43,341. Bitcoin closed Wednesday’s daily candle at $37,077 above an important resistance prior to yesterday’s dip.
The RSI [relative strength index] dipped as low as it had been since the March 2020 liquidity crash, drawing down as low as the mid teens. After BTC regained $10k and BTC rallied during the liquidity crash that year, BTC kept going until its peak of nearly $65k last month and most had almost entirely forgotten about the March 2020 dip.
This pullback on BTC is officially the largest pullback spanning the last two bull market cycles while bulls were still in-charge of the ball. This drawdown has topped out thus far at 53.7% from the all-time high to just over $30k.
A Hard Bounce for the Bitcoin price
After nearly touching $30k the obvious worry to technical analysts was whether or not more downside still existed. The next stop after $30k is probably all of the way back to $20k and the possibility of a double-bottom and retest of $30k are still not out of the realm of possibility.
BTC didn’t breach $30k however and was able to rally all of the way back over $41k – it spent the last 4 hour candle hovering around previous support of $37k.
Bitcoin is crashing: are we in a Bull or Bear Market currently?
There are mixed emotions across the market today on whether Bitcoin and the crypto market collectively have now entered a bear market or whether BTC and alt coins rally much like they did after the March 2020 drawback.
Aggregate Market Cap Price and Outlook
The aggregate market cap from peak to current state has decreased by 32.65% after holding $2 trillion as support for multiple days despite downward price action across the market.
Bitcoin is the world’s most prominently driven momentum based asset and it represents an entire class of momentum driven assets with alts attached to its success, right now bears have that momentum on their side and bulls are looking for an edge.