MicroStrategy Goes Underwater In Latest Bitcoin Crash
- The largest corporate bitcoin holder is on the red.
- Bitcoin dipped to $30,330 on Monday.
- MicroStrategy paid an average of $30,700 for each bitcoin it holds.
The largest corporate holder of bitcoin, MicroStrategy, was at a loss as bitcoin dipped below its average purchase price of $30,700 on Monday.
The bitcoin price hasn’t had a good performance in the past few weeks, dropping as much as 20% in just 36 days since the end of its latest relief rally in late March. But over the past few days BTC has extended its losses as it plunged an additional 19.47% today, closing in on $30,000.
The red candle on the BTC/USD chart led MicroStrategy underwater as the Nasdaq-traded company saw the price dip below $30,700 – the amount it paid on average for all of its more than 129,000 bitcoin. Bitcoin fell as low as $30,331 on Monday, according to TradingView data.
MicroStrategy last purchased bitcoin in early April funded with a bitcoin-backed loan. The software analytics company acquired 4,167 BTC at the time for roughly $190.5 million at an average price of about $45,714 per bitcoin. However, due to the nature of the loan, the company risks getting margin called if the price drops below $21,000. MicroStrategy can avoid getting margin called and having to sell some of the bitcoin backing the loan by depositing more BTC as collateral.
Tesla is also at a loss, but has been for a longer period of time than MicroStrategy as its average purchase price is slightly higher. Tesla acquired 43,200 BTC last year for $1.5 billion, according to data from BitcoinTreasuries.net. The electric car maker’s cost per bitcoin sits at roughly $34,700, leaving the company with a nearly 10% unrealized loss at press time – about $155,000,000.
It is unclear how public companies will deal with a situation where their bitcoin holdings face a loss for a sustained period of time.
The Bear Signal That Suggests Another Bitcoin Crash Is Coming
Bitcoin has recently recovered above $40,000 to much fanfare from investors. This has been a long time coming given how low the digital asset had gotten following the market crash. It is a significant point to cross in the road to another bull rally. One thing though, is that the cryptocurrency still has a long way before it is back in bull territory, which market analyst Justin Bennett puts at the $45,000-$46,000 level.
As the market tries to work its way towards this bull trend, there are also signals that suggest that a bull rally is not the only likelihood in the near future of the digital asset. In fact, bitcoin recently tripped a trigger that suggests that the market is likely to fall into another crash before bulls can take proper hold of the values.
Bitcoin Falls Below 50-Day Moving Average
Indicators like the moving average and simple moving average can often point investors and traders towards the next steps in the market. For the longest time, bitcoin continued to trade above its 50-day moving average, suggesting a continuation of the bull rally, which has mostly been the case. This time, however, the digital asset has not been able to hold above this important metric.
For the first time in over a year, bitcoin has traded below its 50-day moving average. Now, this may not seem like a big enough deal to pay attention to given that the cryptocurrency just started to mark another bullish recovery trend. However, it becomes more pertinent data to look at when we take a look at what has happened historically when this happens.
BTC falls below 50-day moving average
Bitcoin has only traded below its 50-day moving average three times previously. Each time that this has happened, the outcome has always been the same; there is a crash. It followed this in 2014, 2018, and 2019. Once again, bitcoin has failed to trade above the 50-day moving average, and if history is any indicator, then BTC could very well be headed towards a price crash.
Where Are The Points To Sell?
For bitcoin and other cryptocurrencies, there is never a ‘perfect’ point to sell given that it is near impossible to predict where the market will swing. However, placing buys and sells between indicators can help one come close.
This trader expects the digital asset to see further downside before the bulls take over. This means that investors who do not wish to hold for the long term must decide the best points to offload their bags before bitcoin continues to decline.
BTC selloff coming with breakout sellers
The current head and shoulders pattern will see breakout sellers target the current bullish trend, making it short-lived. The time between when these sellers emerge and when the current bull run ends will be the sweet spot. From there, the imminent crash will see bears take over the market, and fast, too.
BTC trading north of $42K
Nouriel Roubini Gloats Over 50% Bitcoin Crash as Investors Fear New Crypto Winter
Nouriel Roubini, a big-name Bitcoin hater, has shared a CNBC article about investors’ fears regarding the chances of another crypto winter coming.
Making a spiteful comment on that, he added that plenty of “s-coins” have fallen by almost 90% as well. Just recently, Roubini, also known as Dr. Doom, called for impeaching El Salvador president Nayib Bukele since he has forced the country’s citizens to begin using and mining BTC.
Investors fear ‘crypto winter’ is coming as bitcoin falls 50% from record highs….
And plenty of other Shitcoins falls up to 86%https://t.co/zBhfRVuON7
— Nouriel Roubini (@Nouriel) January 25, 2022
Bitcoin down to its lowest since July
As the leading cryptocurrency has faced a flash crash to the $33,000 level after a series of price falls from the November historic peak near the $69,000 level, many smaller cryptocurrencies plunged as well. The Bitcoin price fall below $33,000 took BTC back to its lowest price mark since July 2021.
By now, however, Bitcoin has managed to climb back to the $36,413 level. But that is still around 50% below the November all-time high.
This has caused the cryptocurrency market to shrink by more than a whopping $1 trillion since Bitcoin came close to $69,000 in November. Following BTC, Ethereum also went down deep, hitting $2,172 per coin on Monday.
Fears of new crypto winter rise; “time to solve real problems”: David Markus
This has led many investors to believe that another crypto winter might be on the horizon. The previous one came out of the blue in January 2018, when BTC collapsed 80%, falling hard from its $20,000 historic peak.
Among these investors is David Marcus, a former chief of crypto at Meta (Facebook’s parent company). He reckons that the crypto winter is here already and it is the perfect time to build companies that solve real problems and not just pump tokens.
Bitcoin Crash! Fear? Not If You Use Bear Market The Right Way!
The crypto market has been declining steadily for the past few days. Yet, certain cryptocurrencies displayed great performance. At the time of writing this, the Bitcoin price is sitting at $35,889.87. Let’s take a look at it in more detail.
Bitcoin has touched a new low again in the last few hours displaying Bitcoin crash. The major cryptocurrency persisted to decline and is now sitting at $35,889.87. In November, many people were still expecting a Bitcoin price of $100,000. The question is how to use this bear market the right way to make a profit.
BTC/USD Weekly chart – TradingView
Bitcoin Crash: BTC crashed below $36,000
Bitcoin price has dropped below $36,000 at times before stabilizing barely above that level. The crash observed a temporary “fakeout” in which the price streamed above $43,000 but declined back to $41,000 very quickly.
After that, the support at $41,000 declined and the BTC price dropped below the $40,000 mark for the first time in months. As a result, the price temporarily dropped below $36,000, which is the most inferior Bitcoin price since late July, the base of the major spring correction.
Bitcoin Crash: How to Profit in a bear market?
The crypto enthusiasts despise bear markets because of more irregular opportunities to make money. During bull runs, many diverse startups and projects are looking for people of all kinds of stuff. During bear markets, however, things are dissimilar and difficult. People begin noticing everything as undeserved and projects that were affluent with cash-on-hand swiftly begin stressing about resources.
The Crypto world is full of inventiveness and amazement. In this world, bear markets are dependable because they terminate the ill-investments of the bull market. During a bull run, too many projects scale too much money on extremely outlandish assumptions. The deck of ill-investments has been ridiculous and many of such projects are going to quit. This is a wonderful specialty as the norms from those projects can appropriately be employed to more useful measures. The modification in the markets gives more profitable firms and organizations.
Bear markets are beneficial because they reveal what’s actually essential. In the stress journeyed box of a bear market, only the reasonably serviceable survive. Investors can discover out what’s truly significant to people because bear markets are when people derive conclusions about what they require. They don’t buy just any coin anymore. They start probing what they sense. They start making decisions more intelligently and accurately. So, here are the three strategies to make a profit in the bear market.
- Analyze smaller coins: The number of new or latest cryptocurrencies is huge in the market, but there are definitely profitable projects in the market. If you expend some duration accomplishing analysis on the most recent tokens and investing in them as they become known, you can probably make gains.
- Buy and Holding: Buy-and-hold trading is perhaps the most prevalent trading approach among the global investing society. This is because it is the easiest and least complicated process. It is also infrequently cited as a long-term strategy, as it demands purchasing assets and holding on to them.
- Active trading: Active trading is a technique that demands a more comprehensive research into the market and requires a lot more time, understanding, and agility than buy-and-hold. In the world of traditional trading, there are multiple distinguishable patterns of active trading. Still, we are dealing with cryptocurrencies, a totally spontaneous market, so employing specified trading strategies could also be sometimes profitable.
A bear market is just an ending pitch in a stretch in which crypto market rates are dropping. Simple as that. A bear market is an intermission when most people overreact and run for dear lives like the shrewd wolf. A drop in people’s trust will show the volatility of a market. But bear markets aren’t for overreactions. In fact, there is a lot of possibility in such markets.
Bitcoin Crash: Top Crypto Losers Other Than Bitcoin
Bitcoin has once again dropped massively within a short period. At the time of writing this, the Bitcoin price is sitting at $35,302.10. In the last seven days, the BTC price has decreased by almost -18%. The Bitcoin crash could actually turn into a bear market. This post is all about the top crypto losers other than Bitcoin.
BTC/USD Weekly chart – TradingView
5.Top Crypto Losers: Curve DAO Token (CRV) -44.3%
CRV/USD Weekly chart – TradingView
Curve is a DEX for stablecoins, functioning in an AMM environment. According to its website, Curve is a decentralized platform for stablecoins that employs an automated market maker (AMM) to sustain liquidity. In the last 7 days, the CRV price has decreased by almost -44.3%.
4.Top Crypto Losers: Loopring (LRC) -44.7%
LRC/USD Weekly chart – TradingView
Loopring is a Layer 2 scaling solution for the Ethereum network that underlines payment/transfer capability and decentralized exchange (DEX). LRC is the local token. The team has designed zkRollups, which is employed to manage Loopring exchange. In the last 7 days, the LRC price has decreased by almost -44.7%.
3.Top Crypto Losers: Frax Share (FXS) -45.8%
FXS/USDT Weekly chart – TradingView
This is the governance token for the Frax protocol. It is not a stablecoin. This implies that it is volatile like other cryptocurrencies. Also, it is an ERC-20 token, indicating that it is consistent with most Ethereum-based wallets. FRAX protocol is a unique protocol that incorporates a collateralized and algorithmic system. In the last seven days, the FXS price has decreased by almost -45.8%.
2.Top Crypto Losers: Spell Token (SPELL) -46.3%
SPELL/USD Weekly chart – TradingView
SPELL is the governance and utility token. It is built by Abracadabra Money. Abracadabra money is an agreement to acquire a stablecoin named MIM with the credit relation assets. In the last 7 days, the SPELL price has decreased by almost -46.3%.
1.Top Crypto Losers: Pocket Network (POKT) -53.7%
POKT/USDT Weekly chart – TradingView
According to its website, Pocket Network is a blockchain-based Web3 resources provider, that wants to fix this constraint by delivering a no-compromises API protocol for DApps. In the last 7 days, the POKT price has decreased by almost -53.7%.
“Black Swan” Author Nassim Taleb Gloats Over Bitcoin Crash
Lebanese-American mathematical statistician and writer Nassim Nicholas Taleb could not resist the temptation to take a dig at Bitcoin amid a violent sell-off.
In a scathing tweet, the “Black Swan” author facetiously advised those who still view the world’s leading cryptocurrency as a hedge to give up on investing and venture into stamp collecting or bird watching.
If after this morning you still think that #BTC is a hedge against world events, or represents “diversification”, you must stay out of finance, & take up some other hobby s.a. stamp collecting, bird watching or something less harmful to yourself & others.
— Nassim Nicholas Taleb (@nntaleb) November 26, 2021
Earlier today, Bitcoin plunged to $53,524 on the Bitstamp exchange, the lowest level since early October, due to growing panic over the “Nu” variant.
The cryptocurrency, which is often billed as an uncorrelated asset, performed ever worse than some airline stocks, crashing more than 9%.
At the onset of the pandemic, Bitcoin infamously halved in value on March 13, 2020, with detractors deriding the “safe haven.” The cryptocurrency managed to stage an impressive recovery that many believe was boosted by massive quantitative easing. According to Taleb, this proves that Bitcoin cannot act as a hedge against systemic risk since it had corrected more than the stock market.
In July, the Bitcoin-supporter-turned-naysayer also opined that Bitcoin was among the most “fragile” assets in history, predicting that it was going to zero.
It is not just detractors
Even some of the biggest Bitcoin proponents do not view the top cryptocurrency as a hedge just yet.
During his appearance on CNBC, SkyBridge Capital head Anthony Scaramucci, whose fund owns over $1 billion worth of Bitcoin, said that it is still subject to volatility and uncertainty, comparing the crypto king to Amazon in the early 2000s:
I don’t think it’s a hedge against inflation at this moment in time.
79% of long traders REKTed as Bitcoin crashed to $56,000
- About $672 million positions of long traders have been liquidated following the recent drop in Bitcoin and other major altcoins.
- Bitcoin dropped below $56,000 earlier today, a nearly 20 percent drop from the ATH.
The leading cryptocurrency, Bitcoin (BTC), has been on a downtrend since Monday. It began trading the week at around $66,000 on the Binance market. However, it has shaded more than $10,300 from that point, following the drop to $56,000 early Friday. At the current price, Bitcoin is down, trading at a one-month low.
79.3% of crypto long traders REKT
Given the decrease in Bitcoin and other cryptocurrencies, the majority of long traders in the crypto derivative markets have been forced out. About 79.3 percent of these traders have been liquidated in the past 24 hours, resulting in a combined loss of $672 million, according to the data from CryptoRanks.
Long traders on FTX lost $228 million, followed by Binance ($218 million), OKEx ($104 million), ByBit ($57 million), and others.
About $672M of Positions Gets Liquidated Due to #BTC Drop Below $56,000
– $228M on @FTX_Official ;
– $218M on @Binance ;
– $104M on @OKEx ;
– $57M on @Bybit_Official ;
– $24M on @BitMEX ;
– $20M on @DeribitExchange ;
– $13M on @HuobiGlobal ;
– $5M on @Bitfinex . pic.twitter.com/cliG7TTByT
— CryptoRank Platform (@CryptoRank_io) November 19, 2021
Why is Bitcoin crashing?
At first, it’s worth noting that the Bitcoin market has been extremely greedy for the past week and month, probably due to the renewed interest in the cryptocurrency that eventually brought in a new all-time high at almost $69,000. Usually, the market is termed to be due for correction when investors become greedy. But with the recent price correction, the index is returning to the lower side, meaning the price might start peaking again.
Besides this, many people believe the crypto crackdown in China and the United States’ $1 trillion infrastructure bill could also be other bearish factors behind the declining price of the crypto. Also, some claimed that the people are panic-selling due to the upcoming plan for refunding the early users of the now-defunct exchange, Mt. Gox, starting November 20.
Mindao Yang, a creditor of Mt.Gox, said that it may not be until 2023 for creditors to obtain #BTC , and that many of the previous claims have been acquired by hedge funds, and the long-term impact may not be significant. https://t.co/LeMk2kJ5eY
— 8BTCnews (@btcinchina) November 17, 2021
People were concerned that the users might dump their Bitcoin shortly after they were repaid. However, this FUD has been slapped down, as one of the creditors said the repayment may not be until 2023.
‘Who was selling? Not HODLers’ — New data hints at Bitcoin crash ‘culprit’ amid leverage wipe-out
Bitcoin (BTC) crashed by $9,000 in hours on Tuesday thanks to a mass unwinding of leveraged traders and borrowers, one analyst believes.
In a series of tweets on Wednesday, Willy Woo sought to get to the bottom of what made BTC/USD dive to lows of $42,800 on Tuesday.
Woo: Bitcoin margin borrowers and open interest may be to blame
With rumors flying over who was behind Bitcoin’s major price dip, analysts have been crunching data in order to understand where the rout began.
Analogies to the March 2020 crash, sparked by coronavirus measures, abound, but Tuesday’s event showed major differences, Woo said.
“Leverage markets sold off but investor buying just got stronger,” he summarized.
“BTC flash crashes are caused by deleveraging, the COVID crash was similar in that derivatives overreacted, but back then it was supported by investors. This one was completely divergent and a mystery. Cheap coins.”
Woo subsequently suspected that the dip came as a result of margin borrowing and open interest. In a classic domino effect, positions unwound to produce a “cascade” of liquidations and a positive feedback loop, which severely impacted spot price.
Typo. Open Interest was NOT crazy high, it was within normal bounds.
— Willy Woo (@woonomic) September 8, 2021
While the processes involved may be complicated for the average observer, the strength of Bitcoin’s rebound and ongoing investor buy-ins suggest that cold feet among hodlers were not involved in the event.
Related: Bitcoin’s sharp fall from $50K linked to stronger US dollar, gold correlation shows
According to on-chain monitoring resource Whalemap, large-volume investors who were newcomers to the market provided the vast majority of sell-side pressure.
“So yesterday we had a sell off. The move was quite violent and large volumes of Bitcoin were being sold off on spot markets, researchers tweeted alongside a chart showing where those parties had acquired BTC.
“But who was selling? Not HODLers. Mostly whales and in fact the ones that bought their btc only quite recently.”
Bitcoin whale outflows annotated chart. Source: Whalemap/Twitter
For fellow analyst William Clemente, meanwhile, Tuesday provided a welcome reset of frothy derivatives markets.
“Investor activity strengthening + Leveraged speculators wiped = healthy cleansing,” he concluded alongside Woo’s findings.
Trader Who Called Last Bitcoin Crash Issues New Warning As BTC Hovers at ‘Make or Break Level’
The trader who accurately called Bitcoin’s top just under $65,000 has issued another warning to BTC bulls as the world’s biggest crypto hovers around $50,000.
The pseudonymous trader known as Dave the Wave tells his 74,000 followers that Bitcoin is at a “make or break” point as it trades at a critical level where multiple technical resistances align.
“It doesn’t get much better than this – make it or break it time.”
Source: Dave the Wave/Twitter
The analyst’s chart shows BTC sitting at the very top of a rising wedge within a large descending channel, slowly rounding off and threatening to drop below $30,000 over the coming months. Dave the Wave says that to invalidate this thesis, Bitcoin would have to break through one critical resistance level.
“Price convincingly north of $51,000 – invalidated
Price down to the $46,000 area, further validated.”
The trader makes an observation regarding Bitcoin’s interaction with the Gaussian Channels, an indicator typically used to show long-term deviations from price. According to the crypto strategist, BTC already hitting the channels several weeks ago is a sign that it will continue to drop lower.
“Price has never come back to the Gaussian Channel [on the weekly] without then going on to go deep into that channel. Syncs with the LGC (logarithmic growth channel) nicely, and shows a picture of reducing macro volatility.”
Source: Dave the Wave/Twitter
Latest Market Crash Could Be Turning Point for Bitcoin and Crypto, According to Michael Saylor – Here’s Why
MicroStrategy CEO Michael Saylor is weighing in on the future of crypto a week after one stablecoin collapsed and sent ripples through the industry.
In an interview with Fox Business host Charles Payne, Saylor says digital assets can be broken down into three distinct categories.
“The crypto crashes illustrated that the entire crypto world consists of three things: one perfect thing, which is Bitcoin, and it is digital property.
A few imperfect things, they’re stablecoins. The world wants digital dollars. It’s just hard to find them. They’re looking like opaque money market funds.
Then there’s a multitude, a whole host of dangerous things. Altcoins are unregistered securities, and what we saw this week was an altcoin blow-up.
The world wants stablecoins they can trust.”
The entire crypto world consists of one perfect thing, a few imperfect things, and a host of dangerous things. My discussion with @cvpayne on #bitcoin, stablecoins, altcoins, and how the crypto crash this week will accelerate education, regulation, and institutional adoption. pic.twitter.com/CqzR5XftWi
— Michael Saylor?? (@saylor) May 13, 2022
In the wake of the algorithmic TerraUSD (UST) depegging from the US dollar and the affiliated altcoin Terra (LUNA) crumbling to cause price losses of over 99%, the MicroStrategy founder believes that the long-term fallout will be positive both for Bitcoin (BTC) while speeding up the regulation process.
“I think this entire crypto crash is going to be great for Bitcoin. It’s going to accelerate some much-needed regulation of stablecoins, altcoins and the exchanges.
It’s eliminating the political deadlock. It’s educating the world in the difference between Bitcoin and security tokens, and that’s going to facilitate the entry of institutions into this space.”
The Bitcoin bull says that in addition to winning over industry capital, everyday people are drawn to crypto as an alternative way of investing their money separate from the stock market.
“I think every week we’re making new converts… We’re winning over Goldman Sachs, we’re running over the big banks [and] we’re winning over the Fidelities.
People realize this is a good idea, and the basic idea is that billions of people on the planet shouldn’t have to gamble their life savings in a stock market or some casino in order to avoid losing all their money.
So why not invest it in a hard, hard money, maybe the hardest money the human race has ever invented, called Bitcoin, and just wait?”