Following its epic pump yesterday, Bitcoin price hit a wall and dumped almost $2,000 in an hour. Many are pointing the finger at exchanges but the bottom line is that BTC has already started to recover and is heading back towards $13,000 again.
Bitcoin Price Closed On $14000 Before Flash Crash
Another new 2019 high was hit a few hours ago when BTC touched $13,860 according to Tradingview.com. The move meant that Bitcoin price had made almost 50% in seven days, epic by anyone’s standards.
What followed was a sharp pullback as a big red candle dumped around $2,000 in just an hour. Bitcoin price hit the 50-hour moving average and instantly headed north again. In industry terms, this is known as a ‘flash crash’, where one massive trigger can induce the dump. It is not a natural element of the market cycle since recoveries are usually instantaneous.
Crypto trader Josh Rager has called it a pullback, however, albeit a minor one in comparison to previous thirty percent plus dumps.
“18% pullback on the $BTC day chart. If Bitcoin price pulls down to the mid $10ks… (20+%) I’d consider this a big pullback prior to continuation. At this point in time, I consider Bitcoin extremely bullish. 18% pullback might be the new 30% pullback we’re expecting.”
https://twitter.com/Josh_Rager/status/1143992327721148416
Since the incident, Bitcoin price returned to $13,330 before settling at the $12,750 level where it appears to be holding, down 8% from yesterday’s high.
Considering the speed of this recovery, it would not be pertinent to call this a correction as they usually last a bit longer than just a couple of hours. What happens next could be crucial though, if BTC powers back over $13000 then the flash crash was exactly that. If the candles begin to break down however and Bitcoin price falls back below $12000 in the next few hours, we could be experiencing a wider scale correction.
30% Pullback Imminent?
A drop of 30% or more from recent highs would send Bitcoin price back to the mid $9,000s where strong support lies. Fellow trader ‘SalsaTekila’ also commented on the pullback and is poised to buy the dip as many others will be.
“I hope to be wrong about a $BTC pullback towards 8400$ area but am hedged and prepared to #BTFD if it happens.”
https://twitter.com/SalsaTekila/status/1144071415584501760
Travis Kling, chief investment officer at Ikigai Asset Management, is also eyeing a larger pullback. Earlier, just before the flash crash, he tweeted
“Given this price action, now is a good time for a reminder:
BTC is going to pull back. It often does so in savage fashion. There have been 12 pullbacks of >30%. 6 of those have been >70%. Another pullback will undoubtedly occur. Could happen tomorrow. Keep your wits about you.”
Following such an epic surge Bitcoin price could well be gearing up for a dip so be ready when it does.
Will a Bitcoin price pullback occur this week? Add your thoughts below.
Images courtesy of Shutterstock, Tradingview, Josh Rager, SalsaTekila (JUL)