The price of the Bitcoin crashes after a record-breaking rally. The price of the Bitcoin went back down to $7,500, and the broader Bitcoin market experiences a retracement.
Along with Bitcoin, several other digital coins have also declined in their price. The EOS has fallen by 9.5% in the last 24 hours.
Charles Hayter, CEO, and co-founder of digital currency platform stated, “The market has moved a lot in recent weeks, so this is just a retracement.”
Tim Enneking, the MD of Digital Capital Management, stated, “The entire crypto trading community has been waiting for a pullback for some time now.” He further added that several people who have been looking at the market were expecting a pullback by 25% to 30% from the high at $9,100. Until now, the retracement has accounted for half of the expectation.
Several digital currency investors have opined that they have not had a pullback or a longer-term consolidation ever since the bull market has started. While there has been no particular news, it is widely seen that people are taking some gains off the table.
There have been several events which have been putting pressure on the Bitcoin over the past several days.
First, Bitcoin fell after touching the $9,000 price in the past week. Traders took profits, and they have been following a strong bull run, and the bulls have been looking to take some breath here.
Todaro stated, “SEC enforcement actions against crypto projects and companies often put pressure on the space broadly, including Bitcoin.” When talking about the risks of the decline in risk-on assets, he speculated that this development might provide for tailwinds for the digital currencies. He called digital currencies as being “somewhat more speculative assets.”
The Bitcoin indicator has flashed a sell signal. The Divergence indicator detects both positive and negative trends. The indicator suggests that there might be a further downside while Bitcoin halts the recent monstrous rally.
The current downtrend is one of the first downtrends in this year. This is happening when there is a lot of expectation about mainstream acceptance and a lot of new developments in the blockchain space.
Jake Stolarski, a trader, opined that the euphoria concerning cryptocurrency has deflated and “People see where the resistance is, where the stops are, up and down,” Stolarski said. “People are trying to find a stabilizing point where they can layer into a core position.” He further stated that “The key technical levels have created market volatility, for sure, and this is due to sudden shifts in sentiment.”