Bitcoin has had a rollercoaster weekend and shows no signs of cooling down as a new week begins with now commonplace volatility.
With the past three days characterized by a 27% pullback from all-time highs of $42,000, Bitcoiners have watched as both new support levels and new hodlers get a major test.
Modern Consensus takes a look at the market and its prospects as trading gets underway on Monday. We also publish a market roundup every Friday, the latest edition of which you can find here.
$42,000 marks the latest Bitcoin top
Unlike previous weekends, this one was all about losses, not gains for Bitcoin. After hitting all-time highs of exactly $42,000 on Bitstamp, a reversal came but was initially slow to kick in.
It was not until Sunday that the downwards pace began to accelerate, with BTC/USD dropping by almost $6,000 in 12 hours. A brief bounce failed to stem the retreat, and the pair continued falling into Monday, bottoming out at $30,700.
The combined losses versus Friday’s peak thus stood at 26.7% as of press time, with the prospect of further tests of $30,000 still a real feature of the short-timeframe chart. For traders who had long anticipated the weekend’s events, a sense of relief and even enjoyment was evident.
“We just see the first downwards move… we might be getting one more to maybe even $28,000, $25,000, who knows, after which Bitcoin continues its grind,” Michaël van de Poppe summarized in a fresh YouTube update on Monday.
Continuing, he described the parabolic phase from the past months as “broken” for Bitcoin at present, with consolidation now set to be the key feature. The market structure, however, is decidedly unlike the end of Bitcoin’s $20,000 bull market in 2017.
“In the 2017 #Bitcoin bull market, corrections found demand after drops from 30-40%. In the current bull market demand seems to appear after corrections between 15-20%. This is probably indicative of a difference in buyers: retail (2017) vs institutional (today),” software engineer and popular commentator Vijay Boyapati added on Twitter.
As the drop provided some of the most intense short-term trading conditions ever for Bitcoin, payment gateway Abra CEO Bill Barhydt even revelled in the chaos, arguing that it demonstrates the cryptocurrency’s unique possibilities.
“The reversal on the last 1H #Bitcoin candle was one of the biggest dragonflies I’ve seen in my entire career. Even bigger than eBay candles during .com bubble days. If that doesn’t propel us higher (then) TA is completely useless!” he tweeted, referring to technical analysis.
“Keep in mind that this isn’t a penny stock. #Bitcoin is a $500B+ asset. This tells us that the selling was swallowed up whole like a hungry farmer eating a biscuit on a Saturday afternoon.”