If you have been monitoring crypto prices at least for the last 48 hours then you would have surely noticed the steep decline in cryptocurrencies. Bitcoin in particular has lost more than 1.67% of its value in the last 24 hours and more than 12% in the last 7 days.
I recently published an article on Bitcoin’s impending crash. You can read all about it here.
On Thursday, major crypto coins including Ethereum, BnB, and even our own Hive had their prices spiraling down in an event known as a flash crash.
It is still unclear on what caused the price of Bitcoin to fall. This uncertainty makes it hard to evaluate current market conditions and even harder to assess what course of action to take. Would you be closing positions and sell? Buy the dip? Or simply just HODL?
There are circulating reports and various theories so let’s have a look at the possible causes of this sudden price drop. Learning this might give us a better understanding of the situation and help formulate a game-plan.
August is known as the ghost month. For the superstitious, its a period where investing and/or starting a business is ill advised as it is believed be a time of bad luck and misfortune.
In the crypto space things have been pretty quiet, there’s lack of news, happenings, events, updates, which are key factors for trading volumes to go down. This contributed to the constant (but controlled) descent in value of Bitcoin up until 2 days ago.
Come Thursday, traders started to liquidate their derivatives. This is in anticipation of options expiring this month. With options being unprofitable plus the steadily falling price of bitcoin these snowballed into further driving the price of bitcoin lower. And if Bitcoin falls so does the rest. This might be were things started.
While seemingly unrelated, news of Evergrande filing for bankruptcy protection in the United States was announced. Another catalyst for the crypto crash.
And almost as if on queue, word broke out that SpaceX sold an unspecified amount of Bitcoin.
Could all of these events happening simultaneously be a mere coincidence? Or is it part of a grand scheme as part of crypto’s crackdown? As for me, i’ll certainly be buying the dip. I don’t look at yearly highs but instead I focus on yearly lows. I am in it for the long run and with time acting as my main mitigation plan. I should be able to ride through this ups and downs. Share your thoughts on the comments.
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