By failing to reach older highs and settle at previous stubborn support levels, Bitcoin ultimately plunged into a bearish market sentiment with the price falling to $7,400. While there is great uncertainty as to how the situation will develop, there is definitely a lack of bullish optimism at the moment. Before major players decide whether to open long or short positions, they will most likely wait to see if Bitcoin bounces or bleeds deeper.
With no steady momentum, the value of Bitcoin oscillated between $7,800 and $8,300 since the end of September. As such, a decisive price direction was expected to hit the sector at some point and with the lack of buying pressure, Bitcoin dumped back to $7,400. At the time of writing, the value of Bitcoin decreased by 47% since it’s yearly high of $14,000.
Besides general market sentiment, what can clearly indicate Bitcoin’s dump yesterday? Taking a look at the charts, the sector’s most significant asset managed to fall below $7,800 eight times, making the recent fall in value the ninth time Bitcoin was pushed back. Based on this information, Bitcoin was expected to ultimately face a bearish fate, given that only an unexpected event could revert market sentiment.
Bullish positions led to around $200 million in assets being liquidated at BitMEX. According to a claim from a crypto Twitter analyst named ‘taiwandan’, the start of the huge liquidation process could have possibly started with a 3,600 BTC sale on the Bitstamp exchange. The information from TradingView supports this claim, given that a significant price drop can be seen on Bitstamp shortly before the entire market dumped.
Besides technical analysis, are there any significant events in the real world that influenced the fall of Bitcoin? Some hold the view that Zuckerberg’s Congress appearance and Google’s quantum technology announcement heavily influenced the recent price volatility.
Zuckerberg testifies before U.S. Congress
As it was enough for several members of the Libra Association such as PayPal to leave the group, Facebook was placed under even greater pressure as its CEO Mark Zuckerberg was invited to testify before the U.S. Congress on matters such as censorship, advertising, and the Libra project.
Interestingly enough, the market dumped once again at a moment where the U.S. government officially discussed the state of the cryptocurrency sector. Although Zuckerberg urged officials to implement Libra as to not lose its financial leadership to China, it seems that both the political and economic sphere is not willing to leave the control of a global cryptocurrency asset to a mere tech giant.
Google reveals quantum breakthrough
Prior to the price drop, Google announced that the company has achieved a breakthrough in quantum technology that allowed them to develop a supercomputer that had the power to solve a problem that usually takes 10,000 years to solve in only 200 seconds.
While the technology is still decades away from being able to impact cryptographic technologies and effectively destroy the security and network of the Bitcoin blockchain, some believe that investors are still fearful of the recent breakthroughs. As a result, the major news could have led to short-term price oscillations that contributed to the already growing selling pressure.
Whether it is Zuckerberg’s Libra, Google’s quantum computing or the month-long bearish price movement, one thing is for certain, Bitcoin may not reach its yearly high without at least one major event that could contribute to a rising buying pressure. With the information currently available, we only know that CME Group’s bitcoin options platform in early 2020 is the only event to perhaps positively affect the price besides the historically positive block reward halving event.