Bitcoin has suffered heavy losses along with most of the crypto market following the flash crash that happened on El Salvador’s “Bitcoin Day”. The digital possession has actually been attempting to recuperate from this loss considering that it took place 2 days back on September 7th. Part of the cause of the crash has been attributed to a “buy the rumor, sell the news” event triggered by the adoption of bitcoin by El Salvador. But the charts reveal another element that caused the crash.
If anything, the official implementation of bitcoin as a legal tender in El Salvador had bad timing for the market. Historically, September has actually not been the very best of months when it pertains to cryptocurrencies. Countless analyses had pointed to an impending crash after the market had rallied in August. The month of September has actually constantly been among low momentum and it appears like even news as huge as bitcoin being accepted as a legal currency by a sovereign country would not suffice to alter this.
The Curse Of September
September has always shown very similar, almost identical, movements in bitcoin price. A take a look at bitcoin charts reveals that the month has actually normally started with a crash in rate. Thus leading to the “September curse.” The crashes have actually constantly caused a minimum of a 17% loss in worth. Marking the start of a low momentum month as the price struggles to regain its footing in the market.
There normally is a rise leading up to this crash. Ergo, the surge that happens in August. Then motion to exchanges reveals a sell pressure, resulting in a substantial drop in rate due to financiers taking gains from the marketplace.
A look through 2017, 2018, 2019, and 2020 shows the same trends that are happening now. The crashes take place in the very same September amount of time. The flash crashes drag the price of bitcoin into a stretch of struggling price movement. While also acting as a setup for the next rally.
Crucial One-Week For Bitcoin
The next 7 days will show to be the most important for the worth of BTC following the flash crash. Previous iterations of the crash show a steady climb that leads to the development of a new line of support. This appears in the upward corrections experienced by bitcoin for the previous 2 days.
Bitcoin will then form support above $47K, which would lead to a retest of its highs before the crash. Putting the next retest at $53K. Movement over the next seven days will determine if the market is at the start of the next bull or the beginning of a stretched-out bear market. Although history puts it that the marketplace is poised for another bull rally following this crash. Ending in December with a decrease that will begin the next bearish market.
Currently, the price of bitcoin is trading above $45K after dropping below $43K in the crash. Trading volume is down 32.24% in the previous 24 hr, with a 2.36% drop in rate.
