Forget Walmart, Here’s The Real Reason Why Bitcoin Crashed
September 13 2021 - 6:00PM
NEWSBTC
Just another Monday for Bitcoin as the market rallied and
immediately crashed over a fake Litecoin partnership with Walmart.
BTC’s price turned green quickly after as it came out of a sideways
weekend. At the time of writing, Bitcoin and other major
cryptocurrencies record small losses. BTC’s price trades at $44,669
with a 2.5% and 13.4% loss in daily and weekly charts,
respectively. Analyst Ali Martinez showed that current levels could
prove to be “weak” support. The In/Out of the Money Around Price
(IOMAP) indicator, used to measured potential support/resistance
levels, indicate that around 150,000 addresses bought Bitcoin in
the $42,900 to $44,220 region. Thus, if BTC’s takes another dive
below those levels, it could probably return to the high in the
$30,000 region with $40,250 to $37,600 acting as the next support.
#Bitcoin sits on weak support! 🥴 The IOMAP shows that 150K
addresses had previously purchased over 440K $BTC between $42,900
and $44,220. A downswing below this demand wall might encourage
traders to sell, increasing the odds for a bearish impulse toward
$37,600-$40,250. pic.twitter.com/RJTA3yy4nK — Ali Martinez
(@ali_charts) September 13, 2021 Analyst Checkmate for Glassnode
Insights claimed that the recent crash, that saw Bitcoin dropped
from $52,000 to $43,000, was triggered by yet more over-leverage
positions in the derivatives market. Most of the traders in this
sector were taking long positions. Thus, the crypto market was once
again vulnerable to a liquidation cascade as it happened on every
major movement to the downside since May 2021. In this context, and
has it was highlighted by Martinez, the short squeeze to $47,000
took place with a weak market structure. Before the Walmart and
Litecoin fake report, CryptoQuant recorded a high amount of Bitcoin
inflow into exchange platforms. Over 5,000 BTC entered these
platforms potentially suggesting that large players were preparing
for a sudden move in the market. Despite the bearish trend Brian
Pasfield, CTO at Bonded Finance, said the following on the recent
crash: (…) this is an opportunity for smart players because weak
hands are spooked by newsbites and leave coins all over the floor
to be bought up by the smarter players. Bitcoin Holders Still
Bullish, Why The Rally Could Have More Fuel Checkmate noted a
dropped in the funding rates, used to determine the percentage that
long or short positions pay to the other side of a trade, have gone
down significantly. As seen below, the analyst believes the market
has deleverage. In addition, the crash was unable to produce a
spike in the Entity Adjusted Dormancy metric, used to measure the
amount of the Bitcoin supply that exchanges hands in a specific
period. Whenever this metric rises, BTC’s price follows with
downside action at least in the short term. This suggests that the
market “has a preference for longer term holding”, as Checkmate
said. In addition, the HOLD Waves metric, used to measure “age
distribution” in the BTC supply suggest that the interest in the
crypto market stands at an all time low. This correlates with
“late-stage bear markets”, the analyst added. The opposite is
typically true in late stage bull markets (red) and cycle tops,
where the maximum number of old coins are spent and transferred to
new investors, attracted by hype, media coverage and price
appreciation. Related Reading | New To Bitcoin? Learn To Trade
Crypto With The NewsBTC Trading Course
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