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Bad week for Bitcoin: An end in sight?

Photo of: Joseph Stone
by Joseph Stone

The time when the market was looking confidently towards $12,000 USD seems far away in the distance. After a week of confident and constant growth, the bulls seem to have missed out this end of the week and the bears might take over in the wake of two bad days. Bitcoin (BTC) is back flirting with the 10,000 USD today, September 4, 2020. Whether this $10,000 is a strong resistance which could limit the damages is still hard to say at this point.

The BTC fell back down to the $9,900 level before recovering above $10,000. Bitcoin is trading at $10,462 at the time of writing. Data from Coin360 shows that the fall has been unexpected in an otherwise confident market this month.

This means that Bitcoin has just experienced its first fall below $10,000 since the end of July 2020.

This fall comes at a time when the dollar is on the rise again, as the BTC showed a negative correlation with the king of fiat in August 2020.

The flash crash could be caused by a massive sale of BTCs by miners, who have transferred a large volume of their holdings to the exchanges in recent days.

It seems however that most of the major cryptocurrencies have had a hard end of the week, this could be explained two ways. Either, as it has been shown many times in the past, the health of Bitcoin is too important for the whole market and when Bitcoin suffers, so do all of its competitors.

The other likely option is simply that the dollar has regained some of its value, explaining why the regular growth of these last few weeks has suddenly stopped.

The CEO of Global Macro Investor, Raoul Pal, said that in a period of bull run post halving, this type of correction was quite normal. The price of Bitcoin has often experienced a correction of 25% or even 40% in 2017, during this period.

This bearish correction provides new buying opportunities for Bitcoiners who firmly believe in a new All Time High during this cycle, with forecasts of 1 BTC at USD 100,000 by PlanB, or 1 BTC at USD 500,000 according to Tyler Winklevoss.

So we would still be in a period of bull run, which, contrary to what some Bitcoiners might think, includes both highs and lows. In that case, we should simply be appreciating the great buying opportunities that could come and refill our cryptowallets.