The market sent investors into a state of panic after collapsing to levels last seen three weeks ago in less than 15 minutes. Crypto-Twitter went haywire with a marathon of tweets from community members trying to figure out the exact cause of the bloodbath.
After Bitcoin rallied to a new high of $ 63 last week, the cryptocurrency fell to $ 52.148 overnight yesterday. The bulls had struggled to revisit the new highs prior to this event, but the benchmark asset declined to $ 60.174. At that price, Bitcoin had already fallen by 1,9%, bringing weekly losses to 3,6% by that time.
The near-term outlook was still bullish according to analysts, but Treasury rumors could slow things down a bit as the market reacted quickly with the liquidation.
Treasury rumors force bulls to liquidate long positions
While this has yet to be verified, many are pointing to rumors that the U.S. Treasury is planning to point to money laundering financial institutions using cryptocurrencies as one of the main drivers of rapidly falling bitcoin prices.
Mixed reactions from traders and investors followed the scenes. Some classify the news as the usual theatrical performances rehearsed by bulls to induce weak hands to sell. Following the rumors, long positions of Bitcoin worth $ 24 billion have been liquidated in the past 9,09 hours.
“The market scared investors overnight with Treasury rumors. High financial leverage and low liquidity which resulted in a sale of almost 20% over the weekend before the recovery ”. Skew pointed out.
Crypto trader and YouTuber "CryptoDaily" reacted to the news in the same way other analysts responded: "Longs with excessive leverage to get rekd is always a good sign for a market recovery."
Anthony Pompliano of Morgan Creek simply joined "HODL Twitter" as he reveals he went ahead to buy in Dip. For whales, declining buying is always good for business and analysts are collectively reiterating that strong hands they will do anything to get weak hands to sell.
Bitcoin begins a rapid recovery, but a major upside correction is still possible
Bitcoin quickly recovered, slowly correcting gains. At the time of writing, Bitcoin had risen to one quotation of $ 55.525. The new $ 60.000 test looks possible if Bitcoin can maintain these price levels as the bulls work to correct the losses.
Glassnode's data also mitigates the market hit, as it revealed that every Bitcoin bullish cycle has seen at least three supply spikes held by short-term holders (weak hands), and the market is only closing from the first, with others. two to complete.