With Bitcoin taking a little rest after all the excitement over the weekend, BitMEX Co-Founder and CEO Arthur Hayes offered his price prediction for BTC.
According to data from CryptoCompare, around 05:00 UTC on Sunday (August 2), Bitcoin suffered a flash crash that brought the BTC price from the intraday high of $12,106 to $10,69, in a span of around 35 minutes, for a loss of 11.66% against USD.
Here is how Marc van der Chijs, Founder and Chief Strategy Officer at Canadian crypto investment firm First Block Capital, explained on Twitter the reasons for yesterday’s BTC flash crash:
- One or more Bitcoin whales probably decide to take profits after Bitcoin broke through the $12,000 level.
- Due to bullish market sentiment in the preceding days, “speculators had taken leveraged long positions on futures and options markets.”
- Bitcoin broke through $12K at a time that was outside the typical trading hours of European and North American traders, which meant that liquidity was low.
- Once the whale(s) sold some BTC, we got a small dip in the price of Bitcoin. However, since most spectators were long BTC, this move forced them to either “put up additional margins to keep their positions open” or to close their position by selling BTC, thereby pushing the Bitcoin price even lower, and forcing more liquidations; in other words, we got a long squueze.
- This “chain reaction” caused a flash crash that resulted in the price of Bitcoin falling $1400-$1500 (in around 25 minutes).
And this was his advice for Bitcoin traders/investors:
Lesson to be learned for people who don’t follow 24/7? Don’t be alarmed if BTC crashes all of a sudden, there is simply too much leverage in derivatives market and too many inexperienced traders are playing with money there. Do not sell!
The Bitcoin price always comes back fairly quickly, so if you see it happen it’s actually a chance to make quick money. I don’t play that game, but it can be a lucrative strategy. We will see this kind of crashes more often now that a new bull market has started. HODL on!
As for today, Bitcoin started the day at $11,063 (around 00:00 UTC or 01:00 BST on August 3). By 06:35 UTC, the Bitcoin price had reached an intraday high of $11,236.
Currently (as of 12:02 UTC), Bitocin is trading at $11,218, up 0.9% in the past 24-hour period:
The BitMEX CEO’s price short-term price prediction for Bitcoin is: “down, then up”:
With regard to the strong rallies both Bitcoin and Ether have joined in the past couple of weeks, popular macroeconomist and crypto analyst Alex Krüger says that both are macro-driven:
Dutch technical analyst and trader “Crypto Michaël” expects to see longer consolidation on both BTC and ETH:
Featured Image by “skeeze” via Pixabay.com
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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