Wednesday, December 8

Bitcoin’s new downfall causes problems for optimists

Bitcoin’s further decline pushed the currency’s price to $55,600, causing bullish investors to post big losses.

For those who believe in the rise of Bitcoin, for example, it is common to open long positions. At this moment, those who maintain this market position are optimistic about the future, which, at least in the short term, has not shown signs of recovery.

That’s because, in the last few days, Bitcoin has dropped 10% in just 24 hours, testing the support of the US$ 60 thousand, now surpassed. Thus, it is not clear where the floor of the current bearish movement in the market is, which is causing pain in the pockets of optimists.

Bitcoin’s new downturn hurts optimists

According to a market definition in long, investors can assume this risk with futures contracts or even options. But whoever believed in the rise of Bitcoin, the loss may have been big in recent days.

According to analyst Colin Wu, last Thursday (18), US$ 483 million in optimistic positions with Bitcoin were liquidated in the market, after a 5% drop in the market. Another that fell sharply was Ethereum, which saw its price drop from $4,000.

“Bitcoin dropped to 56,663, a 5.5% reduction. The 12-hour settlement value was around US$483 million and ETH dropped to less than 4,000.”

One of the reasons that may have led the market to operate at a low may have been the recent speech by the United States Congress, which publicly declared that it should create regulations for cryptocurrencies, after several companies buy the currencies as a store of value and accept them as a means of payment.

The Central Bank of Europe (ECB) has also taken a stand against the sector, in an attempt to blame cryptocurrencies for the rise in global inflation.

Blame the fall of the BTC could be the large amount of “shitcoins” in the market, says whale

If in the short term the fall of Bitcoin draws attention, practically giving back the gains that the month of November had brought, the whale JOE007 declared in the last days that the market has a big problem to deal with, created mainly in the last days.

According to the profile that operates large amounts of Bitcoin by Bitfinex, the market for alternative cryptocurrencies has risen sharply and drained the value, with investors believing more in “shitcoins” than in Bitcoin. This pejorative term was created in the market to designate projects that have no foundation, but are still speculated by traders.

Thus, JOE007 believes that the decrease in the concentration of value in Bitcoin can cause declines, as it is difficult to maintain a high without buyers. Remember that when Bitcoin drops, the whole market feels the effects, especially altcoins.

“Huge difference from previous Bitcoin cycles: the cash inflow now dissipates into many thousands of shitcoins, instead of being focused on Bitcoin (or a few “big” alts like last time). Even though the total influx is huge, it’s no longer enough to lift all boats. Excuse.”

the whale still he said that in past bullish cycles only Ethereum was a hit on the market, something that is no longer true in recent months.

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