Bitcoin Hit an All Time High! Then Collapsed (Taking the Market w/ it), Here’s Why We’re Not Worried…

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Bitcoin hit a brand new all time excessive of $69,093.28 (hoooray)!

Then promptly collapsed again all the way down to $59,323.90, taking the remainder of the market with it (booo)!

Right here’s our left-curve try at ‘mid-curving’ it, with a guess at what occurred:

The longs took earnings, whereas the shorts loaded up.

(Take a look at us, speaking the mid-curve discuss).

Right here’s what meaning:

Longs taking earnings = the oldsters that had been betting BTC’s worth would go up determined to promote.

Shorts loading up = an entire bunch of parents took bets that the value would go down — by: borrowing BTC → promoting it → and ready/hoping to purchase it again at decrease costs → repay their mortgage and maintain the distinction.

“Cool cool cool. However how is it that all of them determined to take action on the similar time?”

Merchants prefer to bolster their choices, by in search of repeating chart patterns.

(I.e “BTC has executed X round this worth level previously, so there’s Y% probability it’ll occur once more.”) 

However as soon as BTC broke its all time excessive, we had been in uncharted territory (with no patterns to maintain merchants protected n’ heat) — so, lots of these with lengthy positions would’ve bought off at $69k.

Then, understanding that this could possible be a extensively held observe…

Lots of those self same merchants would’ve arrange automated brief gross sales to set off on the similar worth level — resulting in a double whammy of lengthy/brief gross sales which (nearly instantly) tanked the value.

As to why we’re not apprehensive?

In February, Bitcoin noticed probably the most worth appreciation in a single month in its total historical past. That’s a WILDLY violent new document for a ~$1T asset to set.

At these charges, a worth correction was nicely over due (and when it rebounds — the remainder of the market will possible comply with).