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Wow. After days of extremely low volatility, with Bitcoin grinding higher without much downward price action, BTC suddenly dropped 4% in twenty minutes just last hour, plunging from $10,100 to $9,700 in a rapid sell-off. This move filled a CME gap formed this weekend, which is actually a more bullish sign than it is bearish.
Though, as fast as the price dropped, it recovered. As of the time of writing this, Bitcoin is trading at $9,999.92, having effectively recovered the entire drop, save for a few dollars to the upside.
This move caught crypto traders with their pants down, there’s no doubt about that. In fact, data from Skew.com revealed that around $50 million worth of long positions were liquidated in this flash move lower, though few short positions were liquidated on the way back up.
Related Reading: Ripple’s XRP Makes “Huge” Achievement, Setting Stage for Strong Price Surge
Despite this, Bitcoin purportedly remains bullish on a short-term to medium-term basis. Here’s why analysts think so.
Despite 4% Flash Crash, Bitcoin Remains Bullish
Prominent cryptocurrency trader Parabolic Thies remarked that Bitcoin’s recent drop is expected, referencing the idea that assets retrace after strong rallies upward.
He added, that there’s no reason to start worrying because the trend low of $8,800 remains intact on a daily and weekly basis, suggesting this flash crash was but a small retracement in a larger bull trend for Bitcoin.
Thies added in a later tweet that there remain “strong support” on the three-day and one-week charts from $9,400 to $9,600, boding well for the bull argument.
$BTC dropping from $10.2k – $9.8k as of now. This is expected. No need to start worrying unless support at $8.8k is breached.
— Crypto Thies (@kingthies) February 10, 2020
Indeed, legendary cryptocurrency trader Filb Filb wrote in his newsletter that since Bitcoin passed $9,500 on a weekly basis, a move to $11,500 could be had.
A number of analysts have echoed this cheery sentiment over the past few days, making statements like “dips are for buying.”
Bitazu Capital’s Mohit Sorout, for instance, wrote on February 6th that “dips are for buying,” referencing a chart showing that Bitcoin’s 100-day moving average was just crossed by the 50-day, suggesting the BTC trend is starting to heavily favor bulls.
Of course, this statement was made before today’s flash crash, though the bull cross remains intact.
G O L D E N C R O S S
Dips are for buying.$BTC pic.twitter.com/5I776BwWbJ
— MS📈 (@singhsoro) February 6, 2020
Featured Image from Shutterstock
