We hadn’t had anything that looked like a bull run in crypto until recently, now we have that typical sizable crypto correction (brought on by a quick dump). Will this dip be bought, or will we see 2018 style panic selling?
This will be an interesting test.
A correction was needed, but instead of just “a correction,” we got a cascade of stop limits and market sells brought on by some giant market sell orders that sent Bitcoin’s price from $7.8k t $6.6k in moments (i.e. we got a “long squeeze” across all exchanges; we even had exchanges like Bitstamp reporting on it, see the Block for that story).
The bottom of the dump was bought up quick, with prices recovering all the way to $7.4k, but now it has been ground back down to around $7k.
30% – 40% BTC corrections are typical in a Bitcoin bull run, a quick glance of the long term chart will tell you this (try looking up BLX on TradingView).
Even larger corrections are typical in a Bitcoin bear market though.
The question is, is this a dip in a bull market, where buyers will step in and BTFD, or is this just an extended bull trap in an overarching bear market in which panic selling takes us back down to the depths 2018 style?
Only time will tell.
Was this based on news? You could argue this was based on a misunderstanding of the Tether story from May 16th… but the timing wasn’t exactly right. To me it seemed more like someone jump starting a much needed correction on some technical weakness with millions of dollars in buy orders across all exchanges. Don’t know for sure?