Bitcoin’s fifth largest hourly price drop in history happened today, according to data from Coin Metrics. In a shock brutal crash, BTC shed around $1,000 in value in less than one hour. What does it mean?
Bitcoin’s Fifth Largest Hourly Price Drop
Crypto-asset analyst at ARKInvest, Yassine Elmandjra, highlighted the Coin Metrics data on Twitter. With a sudden drop of $1,000, the flash crash was like a scene from Gone in 60 Seconds (or minutes, to be more precise).
Today marks Bitcoin’s fifth largest hourly price drop in price history.
A ~$1000 drop in under an hour.
The only other time we’ve seen a greater dollar price drop is at the Dec. 2017 peak.
Data via @coinmetrics pic.twitter.com/5l0eOehKu4
— Yassine Elmandjra (@yassineARK) February 19, 2020
In fact, the only time that the number-one cryptocurrency has seen such a dramatic decline in value was in 2017 when it hit its all-time high of nearly $20,000. So, what does this mean? Is another bear market around the corner?
Not necessarily. In fact, Elmandjra followed up with a second chart in his thread painting an entirely different picture.
If you look at the price drop in percentage terms, a 9.1% plummet in under an hour is only Bitcoin’s 122nd largest crash. This highlights that such swift volatility in the asset’s movement is fairly normal where Bitcoin is concerned.
Bitcoin’s hourly price change in % terms paints a much different picture.
A 9.1% hourly drop ranks 122nd.
In 2013, the month of April alone saw Bitcoin drop >9% more than 20 times. pic.twitter.com/3V2dKd2ibI
— Yassine Elmandjra (@yassineARK) February 19, 2020
In 2013, the month of April alone so BTC drop by more than 9% more than 20 times. Although, that same month, bitcoin also suffered a gut-wrenching loss of 83% in value.
Long-Term Bullish, Short-Term Derivatives Dominated
Bitcoinist reported earlier that more than $150 million in longs were liquidated on BitMEX causing an avalanche of sell orders.
TradingView analyst, Jacob Canfield, warned traders to proceed with caution yesterday after Binance was out of action. However, looking at the speed and brutality of this latest crash, he concluded that, while bitcoin is “designed to go up over the ‘long’ term,” these sudden movements are led by the derivatives markets:
Short term and mid term price trends caused by overleveraged traders can go any direction they want.
Bitcoin, while fundamentally is designed to go up over the ‘long’ term is currently being driven by derivative markets.
Short term and mid term price trends caused by overleveraged traders can go any direction they want.
What can’t be faked, is the decade long bullish trend
— Jacob Canfield (@JacobCanfield) February 20, 2020
If BTC fails to hold the $9,300 zone, it could pull back all the way to the $8K area, which could result in a 20% correction.
Most analysts are not too concerned over short-term price corrections or Bitcoin’s fifth largest hourly price drop in history, simply pointing to another shakeout before a breakout.
shakeout b4 breakout pic.twitter.com/9qImOt1ptx
— Crypto₿ull (@CryptoBull) February 19, 2020
Bitcoin is a long-game with strong network fundamentals and the next halving on the near horizon. These sudden fluctuations don’t detract from the “decade long bullish trend.”
Are you worried about the Bitcoin price crash today? Let us know in the comments below!
Images via Shutterstock, Twitter @JacobCanfield @CryptoBull @YassineARK
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