Bitcoin finally broke the technical bar of $ 52,000 to the point of reaching $ 52,973. It was estimated that the first of the cryptos was on the way to attack its ATH at $ 64,804 especially since bitcoin would become for the first time, a country’s national currency. But, to everyone’s surprise, the price of bitcoin crumbles on the stock market and loses roughly $ 8,000 in a matter of minutes. This is the biggest daily drop in bitcoin since the Chinese crackdown.
Bitter bitcoin correction: whose fault is it?
Over-liquidation of leveraged positions
Since the bitcoin short squeeze that caused the market to rebound, interest in leveraged products is starting to increase. This interest increases when bitcoin hits the $ 50,000 mark but hits record levels after crossing $ 52K and the approach of Salvador’s formalization.
It only took a small drop to see massive sell-offs of leveraged positions. According to CryptoDiffer, nearly $ 3.54 billion in BTC positions were liquidated on the exchanges within 24 hours. A massive “sell-off” which mainly caused the price of bitcoin to drop by 16%.
Panic after the officialization of BTC in El Salvador
The “legal tender”El Salvador was to be somewhat of a bullish event pulling bitcoin to higher heights. Unfortunately, the price of bitcoin did not move too much after the event. Suddenly, panic invaded the market. Bitcoin loses $ 500 at the start of yesterday’s session. It only took this drop of water to make the camel’s back. The derivatives market, sensitive to panic and uncertainty, eventually cracked. Bitcoin’s hourly chart shows a huge drop of $ 8,000.
The whales are accused of not having supported the price of bitcoin enough after the officialization of El Salvador. Not surprisingly, because when Nayib Bukele made the announcement to nationalize bitcoin, the market hadn’t moved too much. In an interview with CNBC, the director of Valkyrie Investments pointed to the small size and problems of the Salvadoran economy and financial system as factors explaining the whales’ lack of enthusiasm for the news.
El Salvador was not ready to host the crypto premiere. Wald agrees. He reported on the CNBC microphone:
Transaction fees, processing times and other hurdles also make it seem more of a beta test than a solution to the many problems facing the country’s poor.
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