Some sort of a mini crash that took place over this weekend - June 14th to June 15th
On 14th June, Saturday, there was a mini collapse in the Crypto market as price fell below 9000$ , on news of increase in Coronavirus cases in China and US. Although I was not even aware of this price action, this price fall was enough to set about panic and according to various Technical Analysis (TA) that were published in crypto news articles, prediction was that Bitcoin price would fall down even further. However that never happened, a price rebound eventually happened!!
This chart shows it.
So food for thought, was this actually a bear trap? where price falls and people do panic sell offs, only to see that there is eventually a immediate price recovery.
Recalling that March Bitcoin Price fall that no one can forget
As you can see on June 15 price fell by 5% from 9500$ levels to 8900$ and immediately the price bounced to 9500 - 9600$ levels and hit resistance where support is now found at 9200$ levels.
This kind of price action happened at a larger scale earlier this year ,recall March 12th, “Black Thursday” , a day most of us Crypto enthusiasts can never forget, what with that huge sell off that happened when Bitcoin’s price fell by more than 50%. Ouch!! Who can forget that pain. Bitcoin price fell from 9500 $ range to 3800$ range!! Ouch Again, that was a staggering fall!!
March 12 Bitcoin price fall - Black Thursday
Some parallels between the price fall that happened on March and now
However, there are certain things that are common between these two price actions as crypto prices in both these cases fell in sync along with that of traditional markets comprising of global stock markets and gold.
The reason being, people were selling off their asset holdings that they see as risk on speculative instruments to get US dollars, which is still considered as a safe haven as it enjoys the status of the world’s reserve currency.
Image taken from this news.btc.com article
Global Reserve Currency is the most dominant currency in the world. International trade happens with this currency being the medium of exchange. Countries stockpile on US dollars to maintain their foreign exchange reserves as US dollars is the current world reserve currency.
Covid-19 repercussions on the two price actions described above
The news that triggered the recent minor price fall being a spike in the number of Covid-19 cases in China and US, however, Bitcoin has already recovered from the fall.
The jaw dropping March price fall that happened earlier was because WHO finally declared Covid-19 as a pandemic with US President Trump admitting to Covid-19 scenario being serious and halting services of international flights.
Sell your cryptos before it’s price crashes not after it’s finished falling and reached lows
All in all, guys be careful when engaging in Crypto trading, if there has been such a sudden fall, be stone hearted, the price is probably gone too low and it would only rise from here. Try not to sell assets at low price, sell your asset before such a fall happens!!
For ex, you would have been smart if you sold your Bitcoin say before it fell from 9500$ level to 3800$ level during the March crash than sell it when it fell to 3800$ levels. As eventually we know Bitcoin recovered all the losses of that fall, so keep cool.
In the coming days, going to explore some investing tips, so that we can atleast sell cryptos at a profit making some gain, besides gaining that most valuable trading experience.
