BTC - Massive Selloff - Margin Calls to Blame?
Bitcoin is one hell of a bumpy ride, with global equity markets puking their guts out and the trading circuit breaker being flipped not once, but twice this week, there was an inevitable scramble for liquidity.
This was not isolated to cryptocurrency, gold, corporate bonds, reits, silver and a host of other assets were on the chopping block as investors and traders look for anything they could pawn for USD.
Is this a surprise? No.
Is it pleasant to sit through? Certainly not.
Does this mean you should blindly sell all of your crypto? In my opinion, no.
Fundamentally, Bitcoin, does not have anything to do with the Coronarvirus, nor does it have anything to do with the global supply chain disruptions, what it does have a connection with is trading psychology.
The market is coughing up blood, so traders cut their loses on EVERYTHING, they go to cash and catch their breath, if you are still sitting with your crypto, then i would suggest holding on, yes, we could easily see a further dump, as people search for any and all available liquidity, bear in mind crypto is one of the rare markets that trade 25/7, so people who hold cryptocurrency will be able to liquidate their positions in time to cover margin for the following trading day.
Technically speaking, it is an ugly picture, the inverted H + S pattern is invalidated and at press time, we are below the 200 weekly sma.
That being said, the 200 weekly sma has historically proved to be an excellent entry point right when fear is near a peak, it is also worth noting that unless Bitcoin closes below the prior swing low, i remain cautiously optimistic, but i will be watching the market very closely over the coming days.
This was not isolated to cryptocurrency, gold, corporate bonds, reits, silver and a host of other assets were on the chopping block as investors and traders look for anything they could pawn for USD.
Is this a surprise? No.
Is it pleasant to sit through? Certainly not.
Does this mean you should blindly sell all of your crypto? In my opinion, no.
Fundamentally, Bitcoin, does not have anything to do with the Coronarvirus, nor does it have anything to do with the global supply chain disruptions, what it does have a connection with is trading psychology.
The market is coughing up blood, so traders cut their loses on EVERYTHING, they go to cash and catch their breath, if you are still sitting with your crypto, then i would suggest holding on, yes, we could easily see a further dump, as people search for any and all available liquidity, bear in mind crypto is one of the rare markets that trade 25/7, so people who hold cryptocurrency will be able to liquidate their positions in time to cover margin for the following trading day.
Technically speaking, it is an ugly picture, the inverted H + S pattern is invalidated and at press time, we are below the 200 weekly sma.
That being said, the 200 weekly sma has historically proved to be an excellent entry point right when fear is near a peak, it is also worth noting that unless Bitcoin closes below the prior swing low, i remain cautiously optimistic, but i will be watching the market very closely over the coming days.
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