Bitcoin’s price has this tendency to get stuck between lower and upper limits. These are called the resistance points and once it reaches this stage it is difficult for its price to get past this resistance. This happens every once in a while and then Bitcoin needs this big push to go beyond the previous limit and set new price records. It happened last month when finally, Bitcoin price moved beyond the previous threshold of $15,840.
However, it didn’t last long and soon it came crashing down with a rate of 6% which is considerably high as compared to its previous downfalls. Now, that sent the market in a state of confusion and everyone was left wondering what went wrong for it.
Looking closely into the matter, we found out that it didn’t just happen that Bitcoin’s price crashed down but significant reasons were pushing this price down. For once, the increase in the US dollar price and strengthening market caused this mixed state of fluctuations and the other reason was the rising stock market prices.
All of this, though good news for the economy didn’t’ suit the Bitcoin market and its price fell. This is because Bitcoin supreme has and will remain an alternate source of income for people. So, whenever other market forces are witnessing a downfall Bitcoin’s price rises and vice versa which we witnessed this time.
The price reached an all-time high of $15,840 and it took just a day to crash at $14,800
As we talked above, there were reasons to cause this downfall which we are going to discuss in detail now. The above two reasons are the market speculations which we are going to discuss in detail now: the first one is the recovery of Dollar Price, the second one is stock market recovery and the third one is the big Bitcoin investor’s rapid selling of the currency.
The main cause of the rise of stock prices was Pfizer announcing the successful completion of its Covid-19 Vaccine trials.
It said that the vaccine has been tested on 44000 volunteers and it has proven to be extremely effective. It claimed that it is 90% efficient in COVID-19 prevention which is extremely good news. Now, this sent a wave of positive sentiment across the market and the pharmaceutical giant saw a surge in its share price. This improved the state of the U.S. dollar and that of course made the Gold and Bitcoin market fell as they fall under the same sentiment.
The big shots of the Bitcoin and the Crypto market started selling the currency in large amounts
Now, the price drop is always a vicious circle. As when the price falls, the market gets negative and hence the traders start selling even more bitcoin and that leads to further declines in the price. This is because aggressive and excess selling creates a surplus supply as compared to demand and this causes the price to fall further.
The same happened this time, as the price fell the big investors started pulling off from the market, and this leads to a further downfall in the price. When these big-shot investors which in the jargon are referred to as whale take any collective action the results are always very much visible and out there
These were the major reasons that caused the market to witness such a sharp decline in prices. What happens is there are a high number of amateurs and novice traders in the market. They are not very experienced and they follow and do what these Big whales do and this leads to a state of anarchy in the market.
Let’s just hope though the market can recover from this downfall soon and we can again witness a steep rise in the prices. It will happen for sure as these trends in the market come and go and later Bitcoin manage to retain its previous position of the high price.