Just nine weeks ago, the crypto market fell from a cliff.
Within 24 hours, from peak to trough, Bitcoin’s price dropped by more than 50% from ~ $ 7,600 to $ 3,700. It was a move triggered by a global liquidation event in all markets, triggered by a cash run to respond to the economy from the outbreak of COVID-19.
As crypto asset prices plummeted, investors stopped. Some said Bitcoin was moving towards $ 1,000 and below, while billions of dollars in wealth were liquidated, bankrupting companies and funds. It was a mess and no one knew what would come next.
Although a detrimental move, a prominent investor recently noted that the crash was an “atomic bomb” with a large silver rim.
The Crypto Crash Left Bulls with a “Strong Foundation”
Speaking to Anthony Pompliano, Morgan Creek Digital co-founder, in a recent interview, Travis Kling of Ikigai Asset Management claimed that the March 12 cryptocrash was an “atomic bomb”:
“The leverage was very unsustainable when we switched to ‘Black Thursday’. A 50% drop in 24 hours – that was a nuclear bomb event for Bitcoin’s market structure. I can just tell you that without going into details.”
While a nuclear bomb decimated the landscape in real life, Kling said a silver rim had been created by the proverbial explosion.
The crash forced the weak hands and leveraged traders, the Ikigai CIO explained, giving Bitcoin a “strong base” as it has risen higher to $ 10,000 in recent weeks.
That is, since the crypto crash wiped out a majority of short-term speculators and put Bitcoin into the hands of long-term investors, the cryptocurrency market now has more fuel to collect sustainably.
Prepare for more upside
With the strong base building under the Bitcoin price, a pressing question arises: Can BTC and the rest of the crypto market continue to rise higher from here? And if so, where will it end up in the coming years?
The basic principles support the expectations of the next rally.
Glassnode noticed that on May 18 Puell Multiple – the US dollar value of Bitcoin mined every day over the same year’s one-year moving average – recently reached an important zone. It is the zone in which BTC has reached the bottom several times in the past decade.
In addition, the Chinese yuan has started to slide against the US dollar as a result of potential geopolitical and economic clashes between the US and China over Hong Kong and COVID-19.
Analysts say this could boost Bitcoin. Chris Burniske, a partner at Placeholder Capital, explained:
“If China’s CNY continues to weaken against the USD, we could have a repeat of 2015 and 2016, where BTC strength coincided with the weakness of the yuan.”
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