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Why did the Bitcoin price drop below $ 4,000 again?

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On February 24, the Bitcoin price plummeted from $ 4,190 to $ 3,714. This Bitcoin lost in just minutes 11.3 percent on the US dollar. Many traders were not surprised, but some were astonished by the size of the slump in such a short amount of time.

Technical analyst and trader Josh Olszewicz guessed that the CME option exchange in Chicago had something to do with it. Last week, the stock market reported daily record volume. These concerned futures contracts on Bitcoin. On 19 February, the exchange tweeted that the volume had reached more than 18,000 contracts. That was almost twice the previous high of just over 10,000 contracts. Olszewicz therefore assumes that this large volume has created a selling pressure on the asset. These sales in turn would have dropped the price sharply. From this point of view, every bimonthly Bitcoin futures has led Bitcoin to fall from the beginning of the bid.

Other observers, however, believe that the influence of the CME on the Bitcoin price is limited. The reason for this is that they argue that the CME contracts would be settled by cash settlement.

Another Possible Reason

Economist and market analyst Alex Krüger, on the other hand, sees another reason for the Downturn in Bitcoin. For him it was a simple correction. As he explained on Twitter:

“Today's crypto crash was a simple fix. The courses have gone up steeply for 16 days without retreat. Take ETH [Ethereum] as an example: plus 38 percent without withdrawal. Many leveraged long positions are building up. People feel FOMO. Bitcoin reached its first strong resistance level [at $ 4,200] and then gravity acts. “

After a brief recovery, the market may have been ready for correction. In addition, after breaking $ 4,000, Bitcoin hit its first strong resistance level at $ 4,200. Bitcoin took months to jump the $ 4,000 threshold. Something similar could apply to resistance levels in the range of $ 4,000 to $ 5,000.

Krüger went on to say that long ascension phases are often accompanied by long retreats. That applies to every asset class or market. “That's just gravity,” Kruger said.

Since Sunday, the leading cryptocurrencies have suffered 10 to 20 percent slumps. These included Bitcoin, Ethereum, Ripple XRP, EOS, Litecoin and Bitcoin Cash. EOS even lost as much as 18 percent.

The Bitcoin price has recovered slightly since then. Several analysts expect the market to stabilize at the current price range in the near term.

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Author: Peter Joost – Source Post: https://www.kryptovergleich.org/wieso-is-the-bitcoin-kurs-wieder-unter-4-000-usd-gefallen/

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