Bitcoin (BTC) price rose to $ 15,840 before falling to $ 14,800. Just 5 hours after reaching an intraday high, The dominant cryptocurrency fell more than 6%. This massive spike in volatility was likely caused by three main factors.
The three catalysts for the abrupt downtrend were the rebound in the dollar, the fall in the price of gold, as Pfizer announced its COVID-19 vaccine tests were showing positive results and the whales were offloading BTC.
Precious metals and Bitcoin collapsed
according to Associated Press, Pfizer announced that the third phase of its vaccine trials is going well. The big drug company said it was currently shown that Your vaccine prevents 90% COVID-19.
Till date, Pfizer tested the vaccine in 44,000 participants And if this is effective, the next step is for the U.S. Food and Drug Administration to do their own testing before approving the vaccine for mass production and distribution.
After the announcement of the vaccine The Dow Jones rose 1,000 pointsThis led to a strong rally in the US equity market. When the US dollar and stocks triumphed Bitcoin and gold fell at the same time.
Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, pointed to the recovery of the US dollar index and suggested that alternative ports of value such as gold and bitcoin They are pegged against the dollar. When the dollar recovers The price of BTC could fall sharply along with precious metals.
Van de Poppe explained::
“Looks like we’re leaving. DXY is rebounding as there is more certainty at this point, causing assets like bitcoin, gold, and silver to fall significantly. A correction in BTC would be enormous and a great opportunity overall. “
Whales began selling BTC aggressively
When the fall happened CryptoQuant, an on-chain market research firm, discovered that the whales were selling bitcoin.
Trader like the investor “Byzantine General”found a similar pattern. When Bitcoin fell into a whale-induced retreat, retail investors constantly craved BTC.
The whales had several compelling reasons to sell BTC for $ 15,800. First, it’s a major area of resistance that is just below a fundamental level at $ 16,000. If the $ 16,000 level breaks, technical analysts have said that BTC would likely position itself at an all-time high.
When the whales are sold The market tends to react strongly. It is unclear whether the whales would start benefiting from their shorts and try to resume the uptrend. Currently, the pullback has stalled and BTC rebounded above $ 15,100, indicating a near-term trend reversal on the upside.
Long-term players stay strong
Despite the high volatility in the market, the cryptocurrency trader is Galloping Clark stressed that Long-term investors are unlikely to be confused. The said::
“This volatility is just quick money playing BTC as higher beta GOLD risk on the vaccine news. Players who participate on behalf of long-term work for Bitcoin do not change their position. “
In addition to the above factors Glassnode analysts noted that the current activity of short-term owners is reminiscent of previous upward trends. If BTC rebounds sharply after its recent decline, the chances of the rally continuing could increase. Glass knot said::
“The short-term owner of Bitcoin MVRV has maintained its positive relationship for the past six months and has bounced off the neutral line on another occasion. In the past, maintaining this level of support suggests a persistent BTC bull market. “