The world’s most valued digital currency, Bitcoin, has seen its biggest drop in history in a span of only 19 hours.
Notwithstanding the drop, the cryptocurrency is still up around 500% compared to last year.
The decline triggered a major sell-off across cryptocurrency markets due to growing concerns over volatility, jeopardizing the jaw-dropping rally.
The drop initiated a big sell-off on all cryptocurrency markets because of growing concerns about volatility, jeopardizing the jaw-dropping rally.
A top crypto strategist and market analyst Capo says that the bottom is in for Bitcoin, suggesting the traders to buy the current price dip.
In a series of tweets made last Friday the crypto analyst claimed that the bottom was ready for Bitcoin while noting that traders who went long on bitcoin had gotten wrecked in the current correction. Capo further explained that the drop in long positions can help reset the funding rates and also trapping short positions that hope bitcoin is to reach the bottom.
Capo stated that Bitcoin and Ethereum were forming a hidden “bullish divergence” on their respective relative strength index (RSI) charts when examined in higher time frames. The trader named the divergence as an indication that the previous price trend will continue.
He warned that the position could be invalidated if bitcoin fell below $33k and will be confirmed with a close above $57k.
Capo pointed to the bitcoin fear and greed index, which dropped from 94 to 55 with the current price correction. He then noted that Bitcoin’s heatmaps seemed bullish, showing strong demand in the context of limited supply.
The crypto markets have been bullish this year ever since the digital assets started attracting capital from large money managers and corporate giants. The acceptance by the big investors has driven confidence in the smaller speculators.
Early this month, Tesla showed that it had made a $1.5 billion investment in Bitcoin, pledging to start accepting it as a form of payment for its electric vehicles. The US’ oldest lender, Bank of New York Mellon, announced its plans for storing bitcoins and other cryptocurrencies for their clients.
Similarly, Mastercard stated that it will support the use of some cryptocurrencies in its network in 2021, while US asset manager BlackRock and payments company square have outlined their plans for supporting the digital currencies.
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