Over the past 24 hours, the price of Bitcoin fell from $4,900 to $4,280, by more than 12.5 percent amidst an unforeseen short-term price drop.
On fiat-to-crypto exchanges like Coinbase and Kraken, which demonstrate a more accurate representation of the Bitcoin price given the premium on the Tether-to-BTC pair, the price of BTC dropped below the $4,300 mark for the first time in 2018.
$4,280: Where is the Bottom?
On November 19, a cryptocurrency trader and analyst known as The Crypto Dog stated that $4,800, despite being down from 6,300, is not a bottom for Bitcoin.
“$4800 was not a bottom by any means – my arbitrary line in the sand was the wrong arbitrary line. Judging by volume, we are still quite far from a bottom. So far this sell off has been relatively weak (volume wise). BTC / USD longs are rising, while shorts are barely touched. This dump has been straightforward spot selling, and no one is interested in buying.”
Previously, CCN reported that the low volume of BTC in a period of an intense sell-off and free fall suggests a further decline to the low $4,000 region is likely, especially if the volume of BTC begins to increase in the days to come.
The Crypto Dog reaffirmed that a spike in volume on Bitcoin could lead to a decline to a low range at $4,000. Since then, the price of BTC has fallen from $4,800 to $4,250.
“The bears aren’t even pushing, $BTC is just free-falling. Very weak dump, imagine what it looks like when the volume comes in. A short-term reversal could happen at any moment – shorting with high leverage is a terrible idea. However, if you are trying to knife catch, be patient. No one should be in a rush to long this.”
Within the past three days, BTC recorded a 32 percent drop in price without immense sell pressure and large sell orders from the bears in the market. In the short-term, there exists a possibility for a quick turnaround, but investors also have to respect the possibility of a further decline to $4,000 and a test of the $4,000 support level.
Given the intensity of the drop of BTC in the last 24 hours, a minor corrective rally is expected, as long as the sell volume of BTC remains low.
South Korea Has Gone Quiet
The volume of the cryptocurrency exchange market has dropped substantially over the past seven days, as the cryptocurrency market lost more than $50 billion of its valuation.
South Korea has consistently been the third largest cryptocurrency exchange market throughout 2018 and the drop of Bithumb, Upbit, and Korbit’s volume has put the market at risk of dropping out of its position.
If BTC fails to recover to mid-$4,000 in the upcoming days, trading activity in the global cryptocurrency exchange market is expected to drop even further.
Featured Image from Shutterstock. Charts from TradingView.
Author: Joseph Young