Cryptocurrencies hit ktrach this weekend

One of the biggest daily crashes in bitcoin and cryptocurrencies happened on Saturday. We check what the experts have to say about this event and what their predictions are for cryptocurrencies.

Bitcoin fell from $53,875 to $44,582 on Saturday, December 4, one of the biggest crashes in its history, in nominal terms. This year, BTC has already gone for $68,976 and everyone was hoping to break through the psychological barrier of $70,000, but it didn’t. It is trading at around $48,200 this morning, 30% below its all-time high this year.


Source: Market Charts

It is worth paying attention to the Bitcoin Fear and Greed index – it is at the level of 16 points, which shows the extreme fear of investors. Usually, such an indication is a great opportunity to buy.

See also: Cryptocurrencies and bitcoin won’t necessarily protect against high inflation

Is this just a deep correction?

What was the cause of this Saturday crash? Why was bitcoin 21.4% cheaper in one month – theoretically entered a bear market (more than 20% drop)? Many experts see an explanation for the growing fear of the spread of the new variant of the coronavirus. Remember that the stock exchanges have been disappointing since the appearance of the Omikron mutation, and crypto-currencies – like stocks – are risky assets, much cheaper when risk-offs are triggered on the markets.

It should be added that bitcoin – as usual when selling – led to other cryptos. Some cryptocurrencies have been hit pretty hard. Examples? In one month, OMG fell 64%, Polkadot 49%, as did cult dog coin Shiba Inu.

The situation got serious because even famous crypto investor Lark Davis asked, “Do we already have a bear market in bitcoin?”

However, many crypto market analysts believe that Omikron is just an excuse to make a deep correction to the ongoing bull market. They recall that in 2017, during the previous big cryptocurrency boom, there were several corrections on BTC/USD with a range of around -30%.

It is known that the president of El Salvador – the first country to legalize bitcoin as legal tender, has not been scared off by what has been happening in the market for several days. On Twitter, Nayib Bukele admitted that El Salvador was buying a dip, that is, a hole.

Microstrategy Chairman Michael Saylor, who is buying BTC en masse, calls for investment. “Everyone is going to want bitcoin for Christmas,” he wrote on Twitter.

Bitcoin investor Ronnie Moas believes that we are just dealing with a deep correction, in which bigwigs want to scare away the hurdles and take away their precious bitcoins at lower prices. Moas claims that the price of BTC could reach around $168,000 in 2022.

Worth looking at on-chain indicators

It should be noted that the analysis company CryptoQuant believes that the on-chain indicators announced the disaster of this Saturday. There were several signals from them, one of the most important being the growing number of coins held on exchanges. On Friday, before the crash, 45,000 BTC were deposited on the exchange.

CryptoQuant analysts took note of the estimated leverage ratio of all exchanges, which tracks open positions on all exchanges divided by their BTC reserve. So this shows the degree of leverage used by crypto investors. And in the hours leading up to Saturday’s crash, it had risen sharply. On Saturday, the value of leveraged liquidated positions in BTC reached $2.5 billion.

But CryptoQuant has something to reassure. It’s worth taking a look at the Exchange Whale Ratio, which compares the top 10 exchange deposits with all other deposits. It tends to stay below 85% in the bull market and drops below in the bear market. In recent weeks it has exceeded 85%, and in recent days it has even increased to 90%. This suggests that there is no bear market for Bitcoin.

And we recommend one of the simplest indicators that can be used to test whether we have a bull or bear market in bitcoin – the number of searches for the word “bitcoin” on Google. At the top of the bull market it is usually all-time high, now looking at this indicator you get the impression that no one cares about bitcoin…

Interest in the word “bitcoin” on Google

btc trends

Source: Google Trends

See also: Bitcoin heading for all-time highs. Network implemented Taproot update

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