Reasons for the violent fall of Bitcoin from the point of view of this Brazilian specialist

An experienced cryptocurrency analyst and trader, Marcel Bichmann, posted on Saturday (4) on his Youtube channel, RadarBTC Bitcoin and Cryptocurrency, which is an analysis of the last fall of Bitcoin. The largest cryptocurrency in the market started losing its price on Friday (03), and the decline was based on the following night, where it lost the $50K support after a drop in its value of more than 15%.

According to the analyst, there was a definite drop in Bitcoin this time that can only be explained after some notes about the latest historical rally, which occurred on November 10 this year, when BTC was hovering around $69,000.

historical bitcoin price

At the time, Beechman said, Bitcoin was already strong, spurred by the launch of the Bitcoin ETF, and anticipation of US inflation and the impending continuity of stimulus packages for the population as evidenced by the then-President-elect of the United States, Joe Biden.

“At that moment, everyone was thinking that Bitcoin was going to rise nonstop,” he said.

However, BTC halted its rally when the SEC denied a “physical” Bitcoin ETF registration request by US investment manager VanEck. That’s when the downward trend began, Bichman said, citing the November 12 date.

The unfavorable situation became more acute when regulators and members of Congress began to address issues related to regulation Cryptocurrency and companies in the sector, with the aim of reducing the issuance of stablecoins. Then the US Congress set a hearing with companies in the sector after notifications requesting information about the institutions.

“So you have the regulatory uncertainty, the fear, because stablecoins are important to the arbitrage guy, so you can send money from one broker to another faster without having to go through the banks,” Bechaman said, adding:

This regulatory ambiguity depresses the market. The analyst confirmed that there was no news about the specific drop today (12/04).

borrowing operations

There was no news that caused the market to plunge, according to Bichman, who cited leveraged operations as one of the reasons for the fall. On leverage, he summarized, “You deposit $10,000 and you can buy $100,000 of bitcoin or another cryptocurrency — if you go up 5% you get 10x, but if you go down 8%, you lose it all, you get paid,” for example example.

However, what happens with these regular drops of 10%, 12%, considering Bitcoin a volatile asset, is that this ends up accelerating the movement due to this liquidation, the analyst said.

Expect high bitcoin

Pechman concluded that he cannot tell when bitcoin will rebound and that he does not see a break to the upside in the medium and long term because bitcoin is a scarce asset. “Nothing has changed from that,” he said, noting that the asset could take months to recover.

However, he concluded, leaving out more details about regulation in the US, “We are back on the right track.”

See the analysis below: