What goes up can very quickly come back down.
Despite Bitcoin (BTC) continuing its triumphant price rally of late, it hit a notable road bump this morning, suddenly dropping by over $1,000 in just a few minutes—showing that traders can’t be too complacent.
Just yesterday, Bitcoin’s price reached over $17,000 for the first time since January 2018. The next bastion of $18,000 fell soon after when the price of BTC gained 9% in 24 hours. But as the coin reached a 2020 high of $18,400, the bull run was briefly interrupted by a flash correction back to $17,200.
“It could be caused by overzealous leverage traders getting liquidated, or a whale cashing out, or a contract expiration, or a dozen other possible culprits,” Mati Greenspan, popular crypto analyst and founder of Quantum Economics, explained.
He noted that such drastic and rapid price actions are not uncharacteristic for Bitcoin. Due to the first crypto’s extreme volatility, similar drops have occurred frequently during all of its major bull runs.
One of the most notable drops was in December 2017, after Bitcoin hit its all-time high of $20,000. On December 22, it fell $3,000 in a day as the price continued to fall from its lofty heights.
The difference with today’s fall is that it was a much faster drop, in a shorter amount of time. This suggests it was a large sell order that wasn’t enough to match the buying power of the market for very long.
After the fall, Bitcoin’s price immediately continued to move back up. At press time, the BTC price is back at $18,200 already. And counting.