Bitcoin’s price tends to be stuck between lower and upper limits. These are called resistance points and once they get to this stage it is difficult for their price to overcome this resistance. This happens from time to time and then Bitcoin needs that big push to go beyond the previous limit and set new price records. It happened last month when Bitcoin price finally broke above the previous threshold of $ 15,840.
It didn’t take long, however, and soon it was falling at a rate of 6%, which is considerably high compared to its previous falls. That left the market in a state of confusion and everyone wondered what had gone wrong with it.
Upon closer inspection, we found that not only did Bitcoin price drop, but there were also important reasons that drove that price down. Exceptionally, the rise in the US dollar price and the strengthening of the market caused this mixed volatility, and the other was the rise in stock market prices.
All of this despite the fact that good news for business did not match the Bitcoin market and its price fell. This is because Bitcoin Supreme is and will remain an alternative source of income for people. Whenever other market forces experience a decline, the price of Bitcoin goes up and vice versa, which is what we saw this time.
As we discussed above, there were reasons to cause this downfall, which we will now delve into at length. The above two reasons are the market speculation that we will now discuss in detail: the first is the rebound in the dollar price, the second is the rebound in the stock market, and the third is the quick sale of the currency by the big Bitcoin investor.
The main driver behind the rise in stock prices was the announcement of Pfizer’s successful completion of the Covid-19 vaccine trials.
The vaccine has been tested on 44,000 volunteers and has been shown to be extremely effective. It has been claimed to be 90% efficient in COVID-19 prevention which is extremely good news. This sparked a wave of positive sentiment in the market, and the pharmaceutical company saw its share price rise. This improved the state of the US dollar and, of course, caused the gold and bitcoin markets to fall as they fell under the same sentiment.
Now the drop in prices is always a vicious circle. When the price falls, the market becomes negative and therefore traders sell even more Bitcoin, which leads to further price drops. This is because aggressive and excessive selling compared to demand leads to oversupply and thereby further decreases the price.
The same thing happened this time when the price fell and big investors started pulling out of the market, causing further price drops. When these big investors, known in the jargon as whales, take collective action, the results are always very visible and out there
These were the main reasons why the market saw such a sharp drop in prices. What happens is there are a large number of amateurs and beginners in the market. They are not very experienced and they are not very experienced and follow and do what these great whales do and this creates a state of anarchy in the market.
Let’s just hope that the market can recover from this decline soon and that we can see prices rise steeply again. It is sure to happen when these trends come and go in the market and Bitcoin later manages to maintain its previous high price position.