The crypto market is no place for the weak-hearted. The new or unknowing of this fact were handed a hard lesson last week. This came as the market encountered a flash crash, triggered and led by Bitcoin. In a classical setup, it all began just hours after topping $12K, with reports emerging that Japanese authorities had raided the offices of Bithumb.
This is one of the world’s biggest crypto exchanges and leading exchanges in Japan. This triggered massive FUD and investors began panic selling.
This was further accelerated as coincidentally, Coinbase and Binance went down as Bitcoin dumped. While Binance CEO CZ has stated that this was a coincidence on Binance’s part, many have long speculated that this is a tactic used by exchanges during violent price movements, preventing traders from exiting or entering positions and adding to their profits as clients get liquidated.
The top asset having just hit a critical resistance was sent spiraling back down. From highs of $11K, in a matter of hours, the asset was back below $10,500.
Just under this support offered a great buying opportunity with most bulls taking advantage and as a result, staging a rebound. The current range (and especially as it tightens around $10K) has continued to prove sensitive especially to negative news.
Bulls Back In Control
With Bitcoin successfully holding above support, bulls seem to be back in control. Their target is still dead set on the $12K high as support in the long term. Luckily, approaching this level might be easier after such discount buys on Wednesday. Unfortunately, speculators will also be more likely to dump at this top.
A huge trigger is needed to see the digital asset rally well above $12K to give incentive for further buys, ultimately leading to setting support above this. Any uncertainty and indecisiveness around this position will send the asset right back below this level.
In the long term, however, Bitcoin still looks solid now even more than ever with the dollar set for a troubling future. Recent data shows that the U.S deficit has reached a record of over $3T more than tripling this year. Making the case for most why they should exit the dollar and get some Bitcoin as a hedge.