Many analysts weighed in giving the reasons for the brutal crash. Some attributed it to the view of BTC by investors as a risk-on asset rather than a safe-haven. Raoul Pal opined the fall may be attributed to liquidated hedge funds in BTC longs. Ross Middleton of crypto exchange DeversiFi attributed this to weakness in traditional markets coercing institutional investors out of their positions on Bitcoin. Digital Galaxy CEO, Mike Novogratz, disagrees, saying that institutions can’t influence that kind of sell-off, he opined, it was created by leverage traders who indulged in panic selling.
In a relief rally, the bulls were able to reclaim the $5,000 level as it rebounded to a high of $5,900 on Friday, gaining 50% in this move.
Analysts see bullish momentum building up for the top crypto asset in the near term. Pseudonymous trader, Filb Filb gave three reasons for his bullish stance:
Second, the BitMEX funding rate is indicating a bull favored movement depicting a reversal.
Trader CJ who maintained his bullishness stated that the top asset has initiated trading above a “swing low pivot,” diagonal support that has bolstered the price since the crash bottom, showing on a 15-minute chart the 0.75 level of the range, while BTC price consolidates beneath resistance levels.
Ross Middleton and Raoul Pal, both financial analysts believed Bitcoin’s crash was caused by the traditional markets, in which case if the traditional markets sustain its volatility, BTC bearish trend may continue as investors try and hedge their portfolio risk in these hard times, forcing them to give up their BTC positions.
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