The cryptocurrency market has been shaken, to say the least. After a brilliant start to the year, Bitcoin and its compatriots have gone through a slump in the past week that has shaved more than 40% off the industry’s market cap.
Despite the fall in prices, some analysts were still bullish about Bitcoin and the rest of the cryptocurrency market. According to D.I.Y Investing’s tweet, Bitcoin would go through a slump again before rising to the top.
Several market analysts claimed that Bitcoin’s price fall was a reflection of the world markets crumbling under the pressure of the Coronavirus. At the time of writing, Bitcoin was trading for $5323 with a total market cap of $97.29 billion. The $8.95 percent hike over the past 24-hours had enabled the volume to climb to $46.6 billion. The bearish turn over the past week had knocked off more than 33 percent of Bitcoin’s value.
D.I.Y Investing provided input on the dip by tweeting:
“Shake out before Moon I’m long term bullish and am willing to hold these shitcoins to the ground. Funny how a couple weeks ago everyone was bullish now i’m getting hate comments spammed on my channel. Sentiment has shifted and dumb money panic sold the bottom. Rinse & Repeat :)”
The price crash triggered massive sell-offs in the Bitcoin market, forcing even more people into the vicious cycle. Technical analysis showed that the HODLers waiting for the Bitcoin halving were one of the few people holding onto their coins. Bitcoin’s RSI had fallen below the oversold zone after the price fall. This meant that more people were selling Bitcoin than buying them.
The Chaikin Money Flow indicator also sided with the bear in the short term. The reduced capital was due to institutions holding back on investments for the time being. Markets such as the S&P 500 and the Dow were badly hit because of the growing fears of the Coronavirus. On March 16, the Dow Industrial Average fell by 2997 points while the S&P market dopped by 11.98 percent.
A majority of analysts opined that the markets would stabilize once we lower the curve in terms of Coronavirus victims. The accepted logic at the moment was to hold on to your assets so that you can trade them later when the financial ecosystem corrects itself.
The latest Bitcoin fall occurred in two phases: first from $9122 to $7842 and the second from $7842 to $5192. The first fall occurred on March 7 while the second all occurred on March 12. Since then, Bitcoin has not seen a significant rise in prices as the value remained between $4800 and $5500.