Crypto investors have just witnessed the terrifying collapse of this bull market. The overall market cap of the cryptocurrency fell from $2.1 trillion on Wednesday to $1.56 trillion early Thursday – a loss of nearly half a trillion dollars in a single day. Might we have seen the worst yet, with Bitcoin leading the way, up 8.5 percent today, and nearly all altcoins well up against the dollar?
Due to China, Elon Musk, or highly leveraged positions being liquidated, the market took a huge hit yesterday. Retail investors were flushed out in droves, many of them leveraged to the hilt, and even some experienced analysts were chased away.
It was a massive Sunami of epic proportions. We haven’t seen such devastation in the crypto markets since the Covid-inspired crash in March 2020. This was nothing short of spectacular, and the blood in the streets flowed in torrents.
When Bitcoin hit an almost unfathomable $30,000 low mid-afternoon yesterday, the number one cryptocurrency had reached its nadir. In only one hour, the price had returned to $37,500, a 25% increase.
This morning, the Bitcoin price briefly surpassed $40,000, reaching as high as $40,770. At the moment, the market is moving sideways but remains above $39,000.
So, after such a terrifying drop and a very encouraging rebound, will Bitcoin and the altcoins resume their upward trend and continue the bull market?
We don’t seem to be out of the woods yet. We are still well below the weekly 21-day EMA, which experience tells us we need to stay above in order to remain technically in a bull market. The weekly candle will close at midnight on Sunday, giving us four days to rise and close above this crucial mark.
Every week, the stochastic RSI for Bitcoin is trailing along the bottom, and an uptick here could indicate that the price is on the rise. This has already occurred on the daily stochastic RSI, which is rising to the upside.
Another cause for optimism is that Bitcoin’s price activity over the last three months, which has been choppy and sideways, does not seem to be a blow-off top, which is typically used to signal the end of a bull market.
It’s a thrill a minute trip, as is typical of Bitcoin and the cryptocurrency sector. Those who keep and those who purchased the dip will be looking forward to the coming weeks with renewed hope.