Yesterday, we saw Bitcoin price fall by $2,500 as buyers seemed to be trying to break through the $30,000 level. While this incident made some traders skeptical about the continuation of the upward trend, Bitcoin returned to its previous level in less than a few hours.
Caution of Bitcoin traders following sharp price changes
According to Cointelegraph, market data shows that the price of Bitcoin is now trading in the $29,000 range on the Bitstamp exchange, after increasing by nearly $2,000 from yesterday’s price floor.
Yesterday’s sudden fluctuations started with the reopening of the Wall Street market. Just after buyers’ attempts to push the price of Bitcoin to $30,000 were halted as fear spread after the news of Bitcoin transfers to wallets controlled by the US government and the Matt Gox exchange.
Later reports showed that these claims were false, but they caused a significant decrease in the volume of open contracts in the derivatives market and an 8% drop in the price of Bitcoin.
But Bitcoin was able to return to the level of $29,500 before stabilizing the price at this point.
In response, popular trader Jelle from his followers on twitter He asked them to ignore the sudden price changes in the short term. This analyst wrote about it:
The long-term trend of Bitcoin is clear. The events that happen in between are nothing but noise. Trading based on price fluctuations is fine, but focus on the bigger picture. To over $30,000 and rising goals.
jelly added Not sure how the short-term price of Bitcoin will fare, but liquidation of trading positions is usually a good sign of increasing market strength.
Meanwhile, Crypto Tony took a more cautious approach and decided to wait for more signs before entering the market. She Pointed did:
$27,700 is the level I’m targeting today to open a short trading position. But first I need to see a bearish signal to do so, although opening a long position in these conditions also looks risky. Price swings are extreme, so it’s better to be a spectator and focus on a few good altcoins.
Trader Muro also He considers $29,500 as a defining point for Bitcoin, where crossing or returning to this level can determine the direction of the trend.
Massive liquidation of Bitcoin transactions
Meanwhile, a review of CoinGlass data shows the level of panic among market participants.
On April 6, the value of liquidated long and short Bitcoin transactions exceeded $165 million. The total value of liquidated transactions was 338 million dollars.
Market observers, including analysts of the Chinese cryptocurrency platform, also pointed out the strong market reaction to this news event in a short period of time.