The cryptocurrency market was pushed into a state of panic recently after the severe dip in prices. Bitcoin, the most popular and the biggest cryptocurrency on the planet has been one of the worst affected in this scenario as its value fell by more than $2500 within the span of ten days.
Although the situation was quite grim, Bitcoin analysts have not lost hope in the digital asset with davethewave tweeting:
“Though there is an air of panic, this is Bitcoin normal [the panic is normal also]. BTC is super-volatile. It has now corrected 50%. I’ve compressed the time in this chart to provide a visual of log growth time. As they say, good things take time.”
An analysis of Bitcoin showed that the cryptocurrency was struggling to climb back up to bullish highs. The Relative Strength Index, an indicator used to measure the ebb and flow of market pressure, was below the oversold zone. This was a sign that the selling pressure was much greater than the buying pressure, a direct correlation of the price crash.
The Chaikin Money Flow indicator had fallen way below the zero line after changes in investor sentiments. The dip in the CMF stated that the capital leaving the market had overtaken the capital flow into the Bitcoin market. Bitcoin had gone through a similar rise and fall in October when its value fell to $7440 after which it shot up to $9540. The latest bear run started from that range to settle at the current price point of $6695.
Some members of the Bitcoin community had several queries about the price prediction. The most asked question was about whether the current situation was a result of market capitulation. This was again in relation to the fact that during the beginning of November, the cryptocurrency was holding near the $9000 mark which was a surprising reversal in fortunes. The Parabolic SAR for Bitcoin also took the side of the bear as the markers continued to stay above the price candles. This was a direct prediction that before the predicted bullish parabolic move occurs, Bitcoin will have to go through some more downturns.
The ‘panic’ that davethewave talks about seems to be receding because huge Bitcoin transfers have made their mark in the space recently. This included two separate transfers of more than $300 million and $90 million each in the space of 48 hours.