It’s often said that volatility is a trader’s best friend. However, volatility works both ways, and if you don’t know how to manage your trades with it then it can also be suicidal. After a long period the volatility of crypto markets is back, and today it worked in opposite direction. Bitcoin’s winning streak of a whole week today came to an end as it sharply came crashing down to $7,000 level today. Over the course of last 24 hrs Bitcoin has dropped almost 15% as it came down from $8,300 to a little over $7,000. At the time of writing this article it’s trading at $7,044. Clearly, the volatility of Bitcoin is working both ways.
Other cryptocurrencies have also dropped along with Bitcoin. Ethereum, which had crossed the $250 mark after a very long time and was trading at $273 yesterday, has also lost more than 16% and is currently trading at $229. Same goes for XRP, which had shot to the high of $0.47 yesterday. Today it’s trading at $0.37. Bitcoin Cash, EOS, Litecoin, Stellar, Cardano, and TRON – all are down more than 10%. There’s not a single gainer in the top 10, and even if you look at top 50 you’ll find only a single gainer with a little over 4% of gain (Cosmos token). The least losing token in the top 10 is Binance Coin, which is down 6.48%.
There’s a good chance that this may be a short-term correction, and let’s pray that it’s nothing more than that, but frankly speaking, these corrections may get more and more wild in near future if a rally continues. The wilder the rally, the wilder their corrections.
It’s also worth keeping in mind that despite this fall Bitcoin is more than 100% up from its November-December levels. The frequency of sharp declines has, touch wood, lately reduced in cryptocurrency markets. The total market cap at $230 billion is still substantially higher than any other figure that you might have seen in the recent months. After analyzing today’s decline eToro analyst Mati Greenspan commented:
“IF the pullback does reverse now and we continue past the recent highs, there is virtually no major levels of resistance until $20,000.”
So, it looks like a lot of action is remaining to happen in the coming days. Let’s wait and watch!