Bitcoin saw a drop which only rivals its March crash on November 26 as selling pressure resulted in a landslide to near $16,000.
A subsequent rebound allowed bulls to catch some respite, as Bitcoin regained $17,000 in highly volatile conditions which at press time were continuing.
Versus its highs of $19,480, the largest cryptocurrency had at one point lost $3,200 in under 24 hours, corresponding to 14% daily losses.
Trader: $18,500 “critical” for bulls protection
A move lower had been widely anticipated by analysts, who argued that the “straight-line” style of Bitcoin’s recent price gains could not continue forever. As Modern Consensus reported, veteran trader Tone Vays was among them, on Wednesday forecasting a dip as low as $14,000.
“The FOMO got its first punishment,” fellow trader Michaël van de Poppe added in his latest YouTube update on Thursday. Van de Poppe had also long called for Bitcoin to reverse and consolidate lower.
“The upwards level right now, which was critical yesterday, is the range between $18,400 and $18,700. Right now, it’s the critical range upwards as it has to break for continuation of the upward trend,” he continued.
Other market participants were advising investors simply to ignore the dip, with the implication that previous levels would soon return.
“Just another bone of contention – too many tweets that everyone who as ever bought bitcoin is now in profit,” Real Vision CEO Raoul Pal meanwhile complained just as the dip was beginning.
“Well, its the same for almost every asset right now – bonds, equities (not commodities or gold, yet). But focus on the bigger picture not the small milestones. Its BIG.”
Buterin defends Ethereum fees
Bitcoin’s behavior meanwhile triggered fresh pain for altcoin traders. Having spent much of the week beating Bitcoin’s daily gains, large-cap altcoins looked sorry on Thursday, with many in the top ten by market cap losing around 20%.
XRP, which had seen a surge in publicity after beginning its rally last week, still maintained seven-day returns of over 85%.
“Don’t look at current gas fees on ETH network… it will only makes things worse for you,” trader Josh Rager meanwhile summarized about additional problems being faced by traders of ERC-20 and DeFi tokens.
Gas fees to send coins built on Ethereum skyrocketed over the week, leading to significantly increased costs for those using Tether, the largest stablecoin which is a favorite for traders.
Responding, Ethereum co-founder Vitalik Buterin took issue with those criticizing the current problems, which notionally go against Ethereum’s ethos.
“One of the weirdest anti-ethereum arguments I see is ‘Vitalik said high fees are bad but look how high ETH fees went in 2020!!!’ he tweeted.
“Like.. we have *multiple* massive multi-year efforts to solve that exact problem, and the first phase of one of them is literally launching next week.”
ETH/USD lost 14.8% on the day to trade at $512.