On the night of May 13, Bitcoin fell in price to an 11-week low of $ 46 thousand, and the capitalization of the coin dropped below $ 1 trillion. Then the price returned to $ 50,000. This price change disappointed most investors.
The sales began after information about the transfer of a large amount of Bitcoin and Ether to the exchanges. The society perceived this as preparing the whales for sales, and the tweet from Elon Musk about stopping the acceptance of Bitcoin as payment for electric cars until the mining of BTC became more environmentally sustainable.
As a result of the drop in quotations, traders lost $ 3.72 billion per day. Amid the liquidation of margin positions for cryptocurrency.
Altcoins followed the main cryptocurrency. Some TOPs lost up to 20% of their value. But the dominance index continues to fall, which indicates a possible continued growth of altcoins and a quick return to their previous values.
While there is positive news, Palantir (PLTR), a $ 30 billion research firm, has announced that it will accept Bitcoin payments.
However, despite this, BTC price dynamics didn’t take their usual bullish turn.
Another attempt of manipulation
In this situation, it is difficult to predict where Bitcoin will move next. According to experts, if Elon Musk’s statement is perceived as a signal for sales for institutional investors, or if one of the major market participants decides to get rid of Bitcoin, then a collapse is possible.
Perhaps Musk wanted to mitigate the consequences for the market in this way. Or to conduct another manipulation attempt in order to bring down the Bitcoin rate and buy a coin cheaper?
Expected Bitcoin correction
In addition to the large amount of news that generates fears and uncertainty, technical factors can also cause a drop in quotations. According to analysts, a correction was expected for a long time. And its risk became maximum after the cryptocurrency market reached a capitalization of $ 2.5 trillion. After that, only a reason needed to start the correction.
Although the current decline has become a good entry point for long-term positions, in the short-term the market is still in a local downtrend. According to experts, if Bitcoin cannot confidently overcome and gain a foothold above $ 51-52 thousand, it is likely that the fall will continue with new lows in this quarter.
However, they added that an early rise in the value of Bitcoin still possible. The factors that brought Bitcoin above $ 60,000 haven’t gone away and are even intensifying. So, such market situations should be used as an opportunity. At the moment, BTC is mostly holding its position. Experts cite several reasons why Bitcoin has growth potential in 2021: healthy volumes, cascading liquidations, interest from institutional investors and an influx of stablecoins.
Despite periodic drops, Bitcoin is recovering, which means there is a fundamental value that the community understands. Some analysts expect gold and bitcoin to compete for dominance next year.