Today is a historic day for Bitcoin (BTC). The law of El Salvador declaring bitcoin as legal tender in the country went into effect today. However, the party has fallen into the water a bit. The bitcoin price has been corrected hard. In this article you will find a likely reason for this quick and big correction.
Bitcoin (BTC) Dives Below $50,000
Looking at the hourly chart, we already see some small red ones this morning candles. However, at the end of the afternoon, bitcoin suddenly started to fall rapidly. Where we traded just below $53,000 this morning, BTC just fell back to a low from $42,830!
That is a decrease of no less than 20% in a few hours. More than $150 billion of bitcoin’s market capitalization was wiped out. The total crypto market even lost more than $400 billion in the same time frame. So a big correction. What’s causing this? For that, traders have to look in the corner of the margin.
“Futures have been heading for the long (bullish) tilting side. Although it was only a fraction of the correction in the spring, what happened this morning had been written on the wall for a while.
Macro On-chain is still very strong.”
@WClementeIII is spot on here. Futures have been tilting long for weeks. While still just a fraction of the Spring over-leveraging event, what happened this morning had been written on the wall for awhile.
On-chain is still macro very strong. https://t.co/n5ODJkzTU4 pic.twitter.com/mpoqZDe3HS
— TXMC (@TXMCtrades) September 7, 2021
So you can actually see it as a reset where over-leveraged traders are liquidated. This causes a chain reaction as more and more positions are liquidated in rapid succession. This creates a sudden selling pressure with this correction as a result.
Altcoins such as cardano and ripple are not spared
You just read it; the entire crypto market suffered quite a bit as a result. Ethereum (ETH) is close to 10% in the red and is now worth $3,550. Cardano (ADA) drops a little harder back and is 13% in the minus.
Binance coin (BNB) posted a similar decline. The biggest faller of the top 10 is ripple (XRP). The number 6 is 18% in the red. It is striking that solana (SOL) is still 13% in the green and is therefore fighting with ripple for place 6.
In short, the day has turned into a bloodbath. Still, analysts like Will Clemente argue that their bullish macro view has not gone straight overboard.
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