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Bitcoin crossed $17K and successfully sustains above the level, the next levels to be tested will be around $18K
Multiple reasons like the possible upcoming Coinbase story, heavy exchange outflow, probable whale dump, etc might have led to the massive $3000 dip
Bitcoin Moving Towards $18K Slowly but Steadily
Bitcoin price dropped from above $19,000 to close to $16,200 within a small time-frame. In the meantime, the BTC price witnessed a slight pump but later the price dumped further providing the traders yet another ‘buy at dip’ opportunity.
As Coinpedia reported earlier that the Bitcoin price may witness an increase of 1000 % in the coming days, the price seems to move in the right direction. Bitcoin was heavily overbought for a considerably more number of days and hence a healthy correction was a need of the hour.
At present BTC price stands at $17,194 with a drop of 5.41 percent in the last 24-hours. The strong support levels are formed slightly above $17K and BTC price is well sustained to the support levels.
The next target lies around $18K and the BTC price appears to head strongly and is expected to touch in coming days. The Bitcoin bull run seems to be well-positioned as the price is moving upwards but slowly and steadily.
What Made the Bitcoin Price Dump by nearly $3000?
Bitcoin was heavily overbought in recent times which initially rallied the price to the yearly highs close to $19,200. It was very close to surpassing it’s all-time high of $19,665. However, it requires only 13.1 percent more to touch the ATH.
Many rounds circulated in the crypto space mentioning the possible reasons for the drastic Bitcoin crash. Some of them are mentioned below,
- Bitcoin Future trading reached its peak
The bitcoin bullish trend rallied the price close to it’s all-time high, therefore intensifying the leverage trading. Bitcoin futures perpetual funding in all the exchanges had reached its peak when Bitcoin price reached above $19K.
According to Bybit, nearly $2 billion worth of derivative positions has been liquidated in the past 24 hours. Therefore bringing down the BTC price remarkably. As the bitcoin was over-bought, the funding rate in the perpetual market was also overleveraged.
- Negative headlines circulated within the space.
Negative news impacts heavily on any crypto-asset not only Bitcoin. On the early hours of Thursday, the CEO of Coinbase, Brain Amstrong in a series of tweet mentioned his concerns about the upcoming regulations.
Also, the official Coinbase account shared a blog which mentioned a possible report from the New York Times against the exchange. In the middle of the bull run, a minute uncertainty might lead to a drastic plunge.
- Excess Withdrawal from Exchanges
As Coinpedia reported about the resumption of withdrawal of one of the popular exchanges Okex, it resumed from 26 November 2020. The platform witnessed a heavy outflow of crypto-assets. According to some reports, a big number of whales also moved their holdings from Okex to other platforms.
Not only Okex, but many other prominent exchanges also experienced heavy liquidity on their platform. This indicates a possible profit extraction from the traders as well as whales. Therefore leading to a massive price drop.
On the whole, after a healthy correction Bitcoin price appears to have headed towards the target at $18K. But at the same time, sustaining above the specified support levels would be mandatory to have a successful Bitcoin bull run.