Bitcoin plummeted below the mid-$40,000 mark, losing more than 20% in just a few hours. Following the flash crash, the market as a whole fell apart, along with the number one cryptocurrency. The cause of the crash is discussed by Ran and Sheldon.
For the first time in nearly four months, the asset’s price has lost more than 20%, dropping to $42,700 before rising to $46,200 at the time of writing.
Within the first 24 hours of the fall, a $3.5 billion leverage derivatives liquidation occurred, with around 66 percent of the liquidation occurring in the first hour, which is quite comparable to May levels.
There have been rumors that the drop is due to El Salvador’s adoption of Bitcoin as legal tender.
On Twitter, Scott Melker claims that El Salvador’s aggressive dump into making Bitcoin legal tender comes at a time when the World Bank and other traditional financial institutions have expressed dissatisfaction with the decisions.
Ran says he isn’t concerned about the correction because there hasn’t been any evidence of a fundamental market shift, and with the weak hands shaken out, this could be a buying opportunity for institutional investors.
Plan B predicted in June that Bitcoin will linger around $43,500 in September and move sideways, citing the fact that Bitcoin generally pulls back and moves sideways between August and September before soaring towards the end of the year. Plan B projection, according to Ran, is in play.
If Bitcoin closes above the 200-day moving average, Sheldon remains positive in the long run. He shared a chart that demonstrates the upward trend line is still in play, despite the extended wick.
The good news, according to Sheldon, is that despite the drop, Bitcoin’s dominance has not increased, indicating that investors are not overly concerned and remain confidence in Altcoins.
According to Ran, the downturn is an excellent time to get into projects with strong fundamentals, such as Solana and its ecosystem.
However, Ran and Sheldon advise against buying significantly until everything has settled down and the market is ready for another run higher.
This episode premiered on September 7th, 2021.