The Bitcoin price, on May 19, tanked like no one’s business.
It was raining bricks, and the pummeling of crypto investment was relentless. Like a hot knife through butter, the sea of red across the board is unpleasant.
Deflating, saddening, painful for many traders.
On the last week of trading alone, the Bitcoin price plunged 30 percent.
While this happens, Bitcoin dominance is improving, rising from 42 to 46 percent. Regardless of this market state, there is conviction from market participants that BTC, after all, is the better store-of-value.
For crypto believers, it is only natural to ask one question? What happened to Bitcoin in the last 24 hours?
What were the forces behind Black Wednesday? Is there any semblance with events of March 18, 2020, when BTC plunged to below $4k only for momentum to push valuation over $1 trillion in subsequent months?
We have gathered some possible reasons that might have pushed prices to $29k on May 19, 2021.
One, is Bitcoin Falling because of energy concerns?
Bitcoin is valuable but expends a lot of energy. Its miners, Elon Musk, said, are doing an exemplary job, but this doesn’t have to be at the expense of the environment.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
For one, the change of guard in the White House, the United States’ commitment to the Paris Agreement, and the impact of Climate Change on the environment are building up a force that tends to crash everything that goes against their will.
Their muzzles are on Bitcoin.
The problem is, the majority of Bitcoin’s operations are powered by renewable energy. Besides, Bitcoin mining in Inner Mongolia has been barred. Moreover, new mining farms like VBit Technologies, for instance, are setting bases in the United States, utilizing hydroelectric power.
Following comments from Elon Musk and Tesla’s announcement, the Bitcoin price cratered, falling below $48k.
Could this be a continuation of the past two weeks’ losses?
Two, BTC/USD price manipulation?
Late May 20, rumors began doing rounds in Twitter from a source that powerful elements had hatched a plan to deliberately push BTC/USD prices as low as they could to take out a stakeholder who had a colossal BTC position.
Posted last night at 10pm by an "insider" about dumping #bitcoin on coordinated FUD to liquidate a stakeholder.
Fucking wild. pic.twitter.com/25c2tUse7L
— Jacob Canfield (@JacobCanfield) May 19, 2021
The coordinated attempt to dump BTC—sadly taking prices to below $30k—would be short-term. Once their goals have been reached, BTC prices would recover and rally to $70k.
If this is true, some community members are frowning on their malicious actions. However, this is not to say short-and long squeezes don’t happen in traditional markets. They do, but there are consequences.
That a few elements could also organize to take out someone points to how lawless crypto and Bitcoin trading still is. It may also be a big dent for Bitcoin ETF applicants and institutional investors who want to get in legally through traditional bourses but won’t because the SEC won’t approve a derivative product that’s susceptible to manipulation.
Three, a normal BTC cool-off?
Traders argue the Bitcoin price is inevitably pulling back after an exemplary performance in the last few months.
From $4k to over $60k in less than 15 months, show how parabolic the uptrend was.
Bitcoin isn’t immune to corrections. Technical candlestick arrangements pointed to overvaluation and irrational exuberance.
Below is the four occasions where SOPR reset >1 during the 2017 bull market.
Four separate >30% drawdowns.
All 4 occasions, it was a fantastic time to buy $BTC for cheap. This weekends event should be viewed as no different.
— 🟠Dylan LeClair🟠 (@BTCization) May 17, 2021
The crash to $29k is a reset that also liquidated billions of over-leveraged longs.
Pasting a Fibonacci retracement tool between 2018 lows and 2021 highs hints that BTC/USD could technically fall to the 78.6 percent level—or around 2019 highs of $16k—if historical corrections guide.
The question is: Will bitcoin bulls allow this to happen?
Disclaimer: Opinions expressed are not investment advice. Do your research.
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