Amid extremely overbought conditions, Bitcoin (BTC) has fallen by $1,702 – its biggest intraday price drop since January 2018, according to coindesk.
BTC Crash and pull back
The cryptocurrency market leader collapsed by over 15% from the day’s opening price (UTC) of $7,880 to a seven day low of $6,178 on Bitstamp in the Asian trading hours, according to Coindesk.
Bitcoin has recovered more than 50% and at the time of publishing, it hovered around $7000.
“The sell-off seen today doesn’t come as much of a surprise, as the widely followed relative strength index (RSI) has been reporting extremely overbought conditions with a near-90 reading earlier this week,” said Coindesk.
“Buyer exhaustion was also evident from BTC’s repeated failure to hold onto 10-month highs above $8,300, as seen in the last 72 hours.”
Coindesk said a minor bounce could be seen in the next 24 hours before a possible fall back to levels below $7,000.
Forbes said Ripple's XRP led the cryptocurrency market lower, losing 11% over the last 24 hour trading period, while Bitcoin cash and Litecoin lost 10% and 8% respectively.
As reported by Ethereum World News: “Following a couple of days of solid gains, XRP, Stellar and Cardano have dumped around 14% each today. Bitcoin Cash, Litecoin, EOS and Binance Coin are not faring much better as they all lose over 9% on the day.”
The total bitcoin and cryptocurrency market capitalization lost almost $30 billion in a matter of minutes, according to prices from CoinMarketCap, which tracks most major cryptocurrencies.
“Earlier this week technically data showed the mini-bitcoin bull run could be coming to an abrupt end, with the relative strength index (RSI) showing bitcoin was overbought,” sad Forbes.
“Some reports meanwhile suggested the sell-off could have been sparked by a massive $35 million bitcoin sell order placed on the Bitstamp exchange shortly before the sudden extreme swings.”
According to CCN, Su Zhu, the CEO at Three Arrows Capital, Zhu noted that given the recent price action of Bitcoin and other crypto assets is a result of a market structure related move, and expects the market to recover relatively quickly in the near-term.
“This is a purely market structure related move, I expect it to be bought up extremely quickly,” he said.
Josh Rager, a cryptocurrency trader, also emphasized that the gap between the CME Bitcoin futures market closing and the surge in the price of Bitcoin last week has been filled, indicating a positive trend for the market.