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The price of the largest cryptocurrency, Bitcoin, fell as the week begins. Bitcoin, having reached the all-time high of $42k crashed over the weekend and declined further as Wall Street opened, taking losses to 23%.
Bitcoin plunges during the weekend with a low volume, when most of the exchanges and trading platforms are closed for business. The further decline occurred as the market opens on Sunday night and continue to fall as Wall Street opened. Bitcoin was trading around $38,456 before the market opens for the week.
BTC price hits $30, 261
Data from TradingView showed BTC/USD continuing to plunge after the Wall Street opened on Monday, despite reaching a low of $32K during the previous market session. Bitcoin has lost 23% in total within the space of 72 hours after reaching $42k ATH.
It is believed that well-earned miner profit-taking combines with a natural pause in the Bitcoin Bull Run to the market to revisit essential support levels.
Cointelegraph Markets analyst, Michael Van de Poppe said;
"A useful reference for defining a mid-term floor lies in Bitcoin's 21-week moving average (MA). Currently, at $18,000, the indicator will be rising to match previous growth while the price itself may continue to fall, with the two meetings in the middle of the resulting range to form a bottom."
Spotlight on miner profit-taking
"The run above $40,000 may have incentivized miners to pause for profit-taking, with data showing that sales had reached their highest since July 2019. Besides, concerns revolved around the market being overleveraged after such rapid gains." - Cointelegraph.
Chad Steinglass, head of trading at exchange CrossTower told Cointelegraph in private comments that;
“Long positions had gotten very large, and so prudent risk management dictated that long holders, including miners, take a little off the table.”
“The fact that this action occurred over the weekend, when traditional asset players were off from work, and when potential new inflows of cash from new investors were not yet hitting institutional players accounts, lead to order flow shifting to be unbalanced, this time sellers dominating.”
Steinglass added that the status quo may naturally shift in bulls’ favor as the trading week gets underway.
“It remains to be seen whether the start of the workweek in the US and the opening of traditional banking hours will bring with it enough support from inflows to balance or overcome the sell interest or not,” he concluded.
Guy Hirsch, managing director for the U.S. at trading platform eToro, agreed.
"Bitcoin is trading down largely as a result of profit-taking. Since we are still so far above the all-time high set before this recent bullish run-up, it remains to be seen how much further we can fall," he told Cointelegraph.
"Though we don’t anticipate this, a fall below $20,000 could be a bad omen for the conviction institutions have behind their Bitcoin allocations, since they largely stepped in around the $20,000 price level."
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Tobi is a full time day/swing trader with 3 years’ experience in the currency and commodity market. He is interested in cryptocurrencies in combination to the current financial system. Tobi holds a bachelor's degree in Agriculture.