Jeff Fawkes is a seasoned investment professional and a crypto analyst. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.
Friday 13 is at the beginning, but the market already shows the scary new Bitcoin’s bottom of $4,900. BitMEX derivatives exchange is reporting a huge wall of long orders sell-offs.
BitMEX report that they have the biggest order liquidation sequence in the last 16 months. Both longs and shorts have been selling crypto, which causes further price fall and extreme fear. The BitMEX exchange had destroyed orders worth of $702 million. This sum is somewhat a record since November 2018.
During the race, the exchange completed $4 million in buy orders, but $698 million in sell orders. This is a rare market situation when Bitcoin start showing the good old days volatility. It is not a problem for Bitcoin to lose 2000-3000 dollars in price, it went up and down many times. What is a real problem, is that this time the price fall caused by a coronavirus, not the market conditions or the shady market volume spikes.
BitMEX reports that 90% of Orders Belong to Long Positions
Nobody knows what will happen next. When the price falls suddenly, people start selling even more of the coins in a fear they will lose everything in a virtual pyramid. As Bitcoin has approached the bottom level of 4,900, many of the skeptics wonder how deep can the bear trend dig.
Joel Kruger from LMAX group thinks that $5,700 price level is the deepest mark Bitcoin can dive to:
“We believe there is strong support in this area. Players who were committed ahead of the late 2017 rally would be happy to increase their exposure now in anticipation of bitcoin realizing its objective of being a haven and store of value.”
However, the cryptocurrency market is drowning together with the world markets. Bitcoin makes a swirling fall, so a ‘store of value’ argument is a myth. Many of the so-called Bitcoin maxis tell people that you can hedge risks using Bitcoin. But in reality, if you bought Bitcoin at 10,500 this Summer, you will lose a ton of cash. Who grabs that cash? People who bought Bitcoin at a much lesser price.
Other Cryptocurrencies Lose Price Action Too
A few days ago, you could see Bitcoin Cash worth around $365, not it cost only $177 and falling. Ethereum lost more than 33% of its price and now worth $100-115. The market makes coins like XRP struggle, as the Ripple‘s XRP now worth only 15 cents. This is an unbelievable dump because people have seen the coin worth almost 30 cents a week ago.
After the world market continues falling, nobody will have any guarantees as per the future prices of cryptocurrency. If you are the investor, think about your next step twice – there is no come back after you invest in the wrong asset or venture.