Current price movement of Bitcoin
Past few days saw an inflow of bitcoins to the cryptocurrency exchanges, which usually leads to profit taking. For the last 6 months, Bitcoin and most of other cryptocurrencies have been constantly rising, which is a phenomenon that cannot last forever. This therefore led to taking of profits, which in many cases were probably more than hundreds of percent and in combination with few negative information, might have led to price correction.
April is usually regarded as one of the best months for cryptocurrencies, however, April 2021 looks to be different. As of now, Bitcoin is down around 10%, but for past few hours, it has been gaining back a lot of the lost profits. Therefore, next few days will determine whether April will be the first month since September that will close in red or not. Even if that does happen, the talks about end of the bull run might be a bit stretched.
This is in line with PlanB, for instance, one of the most famous Bitcoin analysts, who also created Stock-to-Flow model on Bitcoin. According to him, this is not the end of the bull run since Bitcoin still has a room to grow. Moreover, according to on-chain analytics during the latest dip, accounts with more than 1 million dollars have been buying, while accounts with less than 1 million dollars have been mostly selling. That would mean that in current times, mostly smaller investors (probably retail) have been taking profits.
They might have decided to do so after the Joe Biden tax plans have been officially released. The news about very high tax especially for the „richer ones“ affected almost all markets and therefore it would be reasonable to believe that this news also affected to cryptocurrency market.
Dips, corrections, or bear markets – all are natural
However, it is not very surprising to see movements like this in the cryptocurrency world. This market has always been rather volatile, and the prices tend to move much faster and much higher in percentage amounts than in other markets. Since the beginning of 2021, more than 3 price movements could be marked as a „price corrections, dips or flash crashes“ with loss of more than 15%. These are not unique at all in this world. If anything, movements of plus or minus 15% are very mild for cryptocurrency markets, which is a reason why investors in this world need to account for steep price movements.
These all are, however, very natural. The markets need „rest“ or some breathing time, until they can start rising again, which is probably also the case of the price correction of past few days. Talking about the end of bull market just because we are not in the green numbers on daily or weekly candles, is a bit farfetched. From the fundamental standpoint not much have changed in the past few days so there is no reason to believe that Bitcoin is in the bear market. And from the standpoint of the technical analysis, we will analyse the situation on Friday in our weekly „Bitcoin Friday“ article.