On September 7, Traders were caught almost flat-footed as a sharp collapse took place in the pierce of Bitcoin. The price of this digital coin has fallen below the mark of $43000. This has resulted in a widespread liquidation in the markets of derivatives. It has liquidated more than $3.54 billion.
Bullish sentiment was taking its place on the weekend of Labor Day Holiday in the USA as bitcoin was officially recognized as El Salvador’s legal tender. But the 16% drop in the price of bitcoin has caused the extinguishment of this celebration.
Data shows that the sell-off in bitcoin started during the early hours of trading. It has accelerated into midday since the price of bitcoin fell much lower to the mark of $42837 before the dip buyers bid it back to the mark of $46500.
A fact-based analysis on the current market state had been offered by on-chain analyst Willy Woo. he has posted a tweet outlining the developments that took place on Sept 7. The wider finance markets have opened a day risk-off. It has put pressure on the market of crypto, which cascaded with the passing of hours. The ensuing fall-off has caused $1.1 billion of bitcoin liquidation. But the on-chain data does not suggest that the investors are rushing to close their position. The most recent kind of activity shows that the exchanges are back in the mood of buying.
A follow-up tweet from Woo has shown how the move of Sept 7 took place unexpectedly. It is a good reminder that risk management must be considered when it comes to the crypto market.
Further analysis of this move in Bitcoin has been provided by Michael van de Poppe. He has highlighted the role which has overleveraged traders in the price action of the day. According to him, if BTC manages to close above the range of $47000-$48000 after this pullback, then it will be regarded as an outliner to the early trend. It will serve as a good buying opportunity.
Not all the participants in this market have been caught unaware of this downside move. A follow-up tweet by Crypto_Ed_NL highlights that BTC has reached the green box. Now is the time to see how it is bouncing.
The overall market capitalization of crypto is now standing at $2.103 trillion. The dominance rate of bitcoin is 42.1%.