Bearish traders took control of the market as BTC dropped nearly 20% to hit below $47,000. The biggest cryptocurrency in the market crashed, pulling other coins with it and liquidating over $1.3 billion across major exchanges. This is bitcoin’s biggest 24-hour drop since the famous general market meltdown in May.
The drop represents bitcoin’s biggest drop in two months and it has wiped off the October gains. There was no specific reason for the massive price drop that has brought a sweat on bullish investors. Late Friday night, Asian time, BTC lost 26.4% within a few hours. The drop moved the price to $42,268 from its previous support zone around $57,200.
But the coin recovered over 6% to reach $45,000. Data obtained from Tradingview shows BTCBUSD price at $47,300 as of writing. The drop might see BTC approach the $41,00 price mark. Bullish investors a total of $735 million across all instruments according to data supplied by ByBit.
BTC’s bearish move has now wiped off the total gains in October when it sustained a strong bullish trend into November to hit its new all-time high. But according to previous years’ data, BTC price experienced a massive drop in December before going on a strong bullish move in the following months.
BItcoin suffered an initial drop last week after the news of a new coronavirus strain, omicron, hit the market. But it recovered from the impact and seemed to be eyeing the $59,000 resistance. But fresh regulatory concerns in India and the US might be partly responsible for the latest drop.
This week, the CEOs of the biggest crypto companies in the US were officially invited to a discussion with the US Capitol. The hearing will focus on cryptocurrencies and digital assets and possible regulations. US regulators have repeatedly expressed a desire to understand crypto and make it safe for consumers.
In India, the government was reported to be ready to ban crypto. The news caused a massive selling spree of assets a couple of weeks back, but the Indian Parliament held a hearing about crypto as the government deliberate its actions. But this week, the Narendra Modi-led government has said that it won’t ban crypto but impose regulations.
Opportunity to Buy the Dip
Although BTC experienced a dump, many investors will be happy for another chance to buy more bitcoin at a lower price. Historically, BTC dumps in December are followed by massive bullish movements in the new year. Institutional inventors will be looking to purchase more bitcoin.
Among them is El Salvador, the “Bitcoin Country”. The Bukele Nayib-led government recently purchased another batch of bitcoin shortly before the drop occurred. The country might be willing to “buy the dip” to increase its profit margin when bitcoin recovers.
In related news, Zimbabwe is reportedly interested in adopting bitcoin as a legal tender. The African country has been at the receiving end of the current financial system and is reportedly “desperate” for a way out.