Bitcoin $40,800: The Real Reason of the Crash
The BTC cryptocurrency lost $4,500 on the night of May 18-19
At the time of writing, bitcoin is trading at $40,895. Analysts believe that it is not in Elon Musk's tweets
The real cause of bitcoin's collapse is a combination of several factors. According to Joel Kruger of the LMAX Group, there is too much hype around Tesla and Elon Musk to have such a destructive effect on the cryptosphere.
- Reason 1. Excessive overheating of the market. By the time bitcoin reached $64,000, many investors had a desire to make a profit. Active sales flooded the market with free cryptocurrency, reducing demand.
- Reason 2. Negative impact of sentiment in the financial market. Many investors worry that rising inflation in the U.S. could lead to serious consequences.
These are two main technical factors that, according to Joel Kruger, have caused the current market correction.
Trader Peter Brandt has a similar opinion. On May 2, he predicted that a huge correction was coming. On Monday, May 17, he said that this correction is the largest in 2021. It may well be the one he predicted at the beginning of the month.
According to another trader and cryptocurrency analyst Lark Davis, the reason for the current pullback in the price of bitcoin from the reached highs is panic sales. This confirms Joel Kruger's findings.
According to Glassnode, there has been the highest level of free bitcoins on crypto-exchanges for 4 months. This figure is 2.5387 billion. It was 2.5382 billion BTC.
A similar situation was when the cryptocurrency fell from a maximum of 37-38 thousand dollars to 28 thousand dollars in just a couple of days. The market later recovered. We have already written that Lark Davis expects that the same thing will happen in the near future!
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