Bitcoin (BTC) is facing a major price dip, with its value plummeting by 4.25%, the largest hourly drop in over four months, and its weekly price performance losing 6.28%. The plunge is attributed to an ongoing market sell-off that has seen the world’s cryptocurrency cap drop by 3.82% in the past 24 hours, according to the analytics platform, CoinMarketCap. At the time of writing, the collective crypto market cap stands at $1.03 trillion.
Even as various cryptocurrencies have seen a drop in value, Bitcoin remains the dominant player. Insights shared by Santiment, the crypto analytics platform, reveal that BTC hasn’t seen a single hour drop of 5% or more in four months. Unfortunately, it looks like the streak has just been broken. In Santiment’s tweet, the recovery period for the market leader is said to depend on how worried the crypto market crowd gets in the next few hours. If they do, whales could scoop up weak-handed coins and start looking for a quick recovery.
What Other Analysts and Traders are Saying Regarding BTC’s Recent Price Plunge
Apart from Santiment, there have been other opinions from different traders and analysts regarding BTC’s current situation. For instance, the renowned crypto trader, Michael van de Poppe, @CryptoMichNL, recently took to Twitter to share his thoughts on BTC. He said the current 24-hour price dip was precisely the kind of situation he had been waiting for to buy longs on Bitcoin. Van de Poppe went on to reveal that before he went long on BTC, he wanted to see a clear break of $23.8k. He concluded his tweet by saying that BTC’s price had dropped to his trade entry area of around $22.3k, which it had experienced in the past 24 hours.
The drop in BTC’s value highlights the importance of investors who rely heavily on technical analysis to trade crypto. Technical analysts examine historical prices to forecast future prices through the study of market charts and statistics. Crypto traders who observe technical analysis use it to establish critical price levels and dictate their trading actions. It’s important to note that analysts rely on various tools and strategies that aim to give insights into future trends, but they’re not always accurate.
Risks Involved when Trading with Cryptocurrency
Investing in cryptocurrency is similar to other types of investment; there is always a risk involved. The value of cryptocurrency is volatile and has been known to fluctuate wildly, and this means the risk of losing money is high. The market can change in a split second, sharply dropping or rising within hours, and more often than not, the reason for this volatility isn’t entirely clear.
Therefore, investors must understand that investing in bitcoin or any other cryptocurrency involves both potential gains and losses. It’s important to do due diligence to ensure that their investments are protected.
Conclusion
BTC’s recent price drop, coupled with market uncertainties, demonstrates the volatility of the cryptocurrency market. For traders who rely on technical analysis to make investment decisions, they should incorporate other metrics to make well-informed investment decisions. Ultimately, traders must be cautious when trading in cryptocurrency as it involves significant risks. Investors who consider Bitcoin or other cryptocurrencies part of their portfolio should look for specific ways to protect their investments and manage risks as best they can.
