Why we have seen this dip after all the hype in last week. Expert says, it’s not a crash & ‘buy the dip’. this fall caused by some concern regarding sudden covid spike and power outages in china.
Bitcoin, the world’s biggest cryptocurrency, fell as much as 14% to $51,541 on Sunday from the high of $64,374. Data website CoinMarketCap cited blackout in China’s Xinjiang region, which reportedly powers a lot of bitcoin mining, for the selloff.
Luke Sully who is the CEO at digital asset treasury specialist Ledgermatic, said in an email that people “may have sold on the news of the power outage in China and not the impact it actually had on the network, The power outage does expose a fundamental weakness; that although the Bitcoin network is decentralized the mining of it is not”.
Another reason for the fall is that, Turkey’s central bank banned the use of cryptocurrencies for purchases on Friday.
Edward Moya, the senior market analyst at OANDA, said cryptocurrencies had been ripe for a pullback. The market has become overly aggressive and bullish on everything.
The way market was up continuously it could have been any negetive news that could triggered this fall.
All though after this much of decline Bitcoin is still up more than 90% from Jan,2021.
Let’s see the daily and monthly basis Btc candlestic chart.
In both cases, we can see a slightly negative sign. In daily candle, it brokes the trendline and in the monthly chart, we clearly see the highs and from that high selling pressure.
What the investors should do now, one should wait to cross the trendline again to buy or riskier traders/Investors can average by buying some and wait for the re-entry if it crosses the trendline.