Red is in Vogue

On Tuesday September 24 a fairly dramatic cryptocurrency crash took place, as a result of which BTC/USDT pair rate dropped to $7,800, returning to its lowest level since early June of this year.

The wave of selloffs started when the technical support level of $9,200–$9,300, which was also the lower boundary of the triangle, was breached. We have discussed this triangle in one of our previous BTC/USDT reviews.

Badly hurt were the BitMEX traders, who got “sheared” for over $600 million. This means that the market was expecting growth, and those who failed to use stop-loss orders had their positions liquidated.

A number of experts link this latest meltdown with the record drop in Bitcoin hash rate, from 98 TH/s to 67 TH/s. Some suggest that the spectacular collapse of the foundational cryptocurrency rate is due to the keenness on the part of certain market players to buy cheap BTC. In this context it is also necessary to recall the weak start of the cryptocurrency platform Bakkt. We will follow their trading volumes closely: they may very easily reveal the party behind the massive selloffs.

We will not at all be surprised if the June 2017 scenario is repeated, when the price shot up to the all-time high of $20K over the 4 months of local growth and the sudden escape from the triangle. Many market participants did not miss out on buying on the down trend and replenishing BTC supply in their wallets, as evidenced by this optimistic tweet by Anthony Pompliano.

As a result of the market bust the market capitalization dropped by $30 billion, to $218 billion. The Fear & Greed Index rolled back to 15 points, having lost 24 points (or -61%), which signals that the market is in bearish mood.

If the market continues to decline, its capitalization may slide to the levels of May 2019, which were in the $160–$170 billion range. In this situation we do not recommend any active moves on the market until the situation becomes clearer.