Today, another Bitcoin price crash occurred.
Yesterday, in fact, the price of BTC had dropped to $91,000 in the evening, but last night it even fell below $90,000.
However, there is a possibility that the local minimum peak of this period was reached today.
Summary
The Crash of Bitcoin Price Towards $90,000
The crash actually began at the end of October, when the price of BTC dropped from $115,000 to $106,000.
At the beginning of November, it seemed capable of bouncing back, but between November 3rd and 5th, it dropped again, falling back below $100,000.
Subsequently, there were two more declines, one just before mid-month that brought it back below $95,000, and the last one started yesterday.
This latest decline might still be underway, but there is at least one factor suggesting it could end today.
In total, however, in twenty-two days the price of Bitcoin has lost 20%.
In traditional markets, this would be considered a real crash, whereas in crypto markets it should actually be defined as a mini-crash, because true crypto crashes result in a -20% drop in just a few days, not over more than three weeks.
Moreover, the current price of BTC is -28% from the all-time highs recorded a month and a half ago, which is certainly not a low level.
The Role of the Shutdown
It is possible that one of the triggering factors of this mini-crash was the shutdown of the US government.
Started on October 1st, it effectively locked hundreds of billions of dollars in government accounts that would otherwise have been injected into the market.
It is noteworthy that yesterday’s crash in traditional markets was not accompanied, as one might expect, by a rise in gold. On the contrary, the price of gold has lost more than 3% over the last four trading sessions.
This is a significant drop by gold standards, suggesting that there is no shift from risk-on to risk-off in traditional stock markets at all.
The issue, therefore, might be something else, and it has all the signs of being a minor liquidity crisis, which consequently affects prices across the board.
This minor liquidity crisis might have been caused by the hundreds of billions of dollars stuck in US government accounts since October due to the shutdown.
The Timing
Returning to Bitcoin, on the day the shutdown began (October 1st), its price trend was upward, and it remained so for another six days. In fact, on October 6th, it recorded its all-time high above $126,000.
At that point, however, a downward trend began, with an initial drop below $121,000 already the following day, and a second significant decline on October 10th, falling below $110,000.
After a period of volatile sideways movement right around $110,000, the three aforementioned declines began at the end of October.
The curious thing is that it has been exactly six days since the shutdown ended.
The day the US Congress approved the end of the shutdown was November 12, but in fact, it was only on the 13th that the US government was able to resume all activities, primarily payments.
But the even more curious thing is that the downward trajectory of Bitcoin’s price in these first six days after the end of the shutdown turns out to be a mirror image of the first six days after its start: daily movements are practically identical, just in reverse.
At this point, one might also expect that the local minimum peak of the BTC price was reached today, although this is merely a hypothesis that still requires confirmation.
Bitcoin Price Predictions
There are numerous negative forecasts circulating regarding the short-term trend of Bitcoin’s price.
Indeed, almost all indicators are negative, making it difficult to envision a rebound today.
However, the US government shutdown was the longest in the entire history of the United States of America, therefore the current situation is actually very unusual, to the point that it cannot be analyzed with the classic tools used for other similar occasions.
In other words, there is absolutely no guarantee that what happened in the past will repeat itself, precisely because the current situation has actually never occurred before.
This makes the current forecasts a bit weaker than usual, while allowing for the possibility that the hypothesis of an exit trend from the shutdown similar to the entry, but in reverse, might make sense.
It is worth noting that, should similar but opposite rises occur in the coming days compared to the two declines in the first half of October, the anomaly might simply dissipate, perhaps over the course of one or two weeks, and the trend of Bitcoin’s price could resume its normal course.
In this regard, there is a possibility that in the coming weeks the Dollar Index could significantly decline, which might further support BTC.
