Crypto markets have just hemorrhaged $20 billion in their largest selloff of 2020. Bitcoin plunged almost a thousand dollars in a couple of hours but what has caused it?
Just when crypto markets started to look bullish again with total capitalization approaching $300 billion a huge selloff occurred in a matter of hours. Around $20 billion exited the space in the year’s largest single day dump dropping total cap back below $280 billion.
Bitcoin Dumps 10%
From an intraday high of $10,300, bitcoin dumped to a low of $9,300 shedding a thousand dollars in a couple of hours. Since then prices have moved up marginally to settle around the $9,600 level but further losses look likely.
Analysts warned yesterday that unless BTC makes a new higher high above the 2020 top of $10,500, the correction is likely to resume.
That scenario played out in late trading on Wednesday when one huge red hourly candle smashed prices down almost $900. From here the asset is likely to return to the $9,300 level where there is support.
Analysts and traders are noting the swing failure pattern and the long wick below the previous lows indicating that there could be liquidity in this area.
This is my thinking. I shared the SFP on the 17th, the wick below the previous swing low. We now have 2 more 4 hour candles with wicks below that line. That indicates there’s liquidity in that area. It could be fully tapped now, hence the lower orders in case. $BTC pic.twitter.com/uMhFbrq5Fs
— The Wolf Of All Streets (@scottmelker) February 20, 2020
Speaking of liquidity,