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Home Cryptocurrency news Bitcoin

The Real Reason There Wont Be A Bitcoin Black Thursday Repeat

Tony Spilotro by Tony Spilotro
5 months ago
in Bitcoin, Cryptocurrency news, Technical analysis
Reading Time: 3min read
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Man in white shirt and black tie holding an empty wallet.

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Bitcoin has begun to pull back after the crypto market hit levels of extreme greed not seen in well over a year. Already, sentiment has turned toward talk of new lows, or a revisit of a Black Thursday-like selloff.

The pandemic is still a prominent factor, and the economy is only worsening. However, there is one important reason standing in the way of any chance of another Black Thursday style collapse.

Will The Latest Crypto Market Crash Lead To New Black Thursday Style Lows?

Black Thursday is a day that few Bitcoin investors and traders will ever forget. Just days following a retest of $10,000, the first-ever cryptocurrency found itself in the grips of fear, and panic.

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A perfect storm of panic-selling and a near-endless cascade of overleveraged trader’s stop losses being hit on BitMEX took Bitcoin price back down to bear market lows in a flash.

Related Reading | Same Indicator That Called March Plunge Raises Chances For Big Bitcoin Drop

Over 48 hours, the cryptocurrency dropped more than 50%. But Bitcoin bounced hard after that low, rising over 100% to current levels, and could soon keep on climbing. BTCUSD spent several months consolidating, eventually smashing through resistance at $10,000 and pushing as high as $12,400 for the 2020 peak.

The leading cryptocurrency by market cap is now trading at $11,750, however, following a rejection above $12,000. The quick change in sentiment from extreme greed to a return of fear, already has some traders calling for new lows for targets.

However, there’s one important factor preventing another Black Thursday like selloff to hit Bitcoin ever again.

 

bitcoin btcusd btc supply exchange

Few BTC Held On Exchanges Makes It Difficult To Sell Bitcoin Quickly

Following Black Thursday, whether it was the risk of liquidation, stop losses getting hit, or simply to hold post-halving for the new bull run, the amount of BTC held on exchanges has dropped considerably.

No matter how bad the selling gets on any abrupt selloff, there’s significantly less Bitcoin held on exchanges for investors or traders to sell quickly at the first sign things are turning.

Related Reading | Bitcoin’s Bull Run Is Here—And History Shows 20MA is the Level to Buy BTC

Both exchange reserve data and miner outflow paint a similar picture: there simply isn’t enough BTC held on exchanges to move the needle to such an extreme.

Several other signs that Bitcoin is close to starting a new bull market also suggest that new lows aren’t likely. The asset has an extremely limited supply. For example, a recent 21,000 BTC purchase from Nasdaq-listed firm MicroStrategy amounted to nearly a full month of newly minted BTC.

Grayscale also continues to gobble up a lion’s share of Bitcoin’s scarce supply. Although prices are dropping right now, there’s so few BTC on exchanges to sell, and so few Bitcoin to go around, as soon as more companies like MicroStrategy make similar buys, the only extreme moves we’ll see, will be up to new highs.

Tags: bitcoinbtcbtcusdBTCUSDTcryptoxbtxbtusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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