While the latest correction liquidated $4 billion to test weekly bull market support, BTC moves from weak to strong hands. Amidst this, today, Bitcoin mining difficulty increased by 21.5%, the largest positive difficulty adjustment in almost 7 years.
This resulted in liquidating 393,593 traders for $4 billion in the past 24 hours, as per Bybt.
Crypto stocks from Coinbase Global Inc., Marathon Digital Holdings, Riot Blockchain Inc. to Microstrategy Jack Dorsey’s Square Inc., and Tesla, everything slipped.
Crashing to $46,000, Bitcoin price had managed to recover to $52,500 only to tumble back down to $48,420 today. As Bitcoin dips, Grayscale Bitcoin Trust (GBTC) rips, hitting a record discount of under 20% to net asset value (NAV).
While BTC was working on developing a range in 60K-46.5K, the actual range is currently 59.5K-46K.
However, nothing goes up in a straight line, and pullbacks are part of bull runs.
With the latest correction, the price has dipped below 100 daily SMA, which is rare and has historically identified major bottoms, noted Charles Edwards, founder of Capriole Investments. “Any sustained time under the MA100 would be very concerning,” he added.
In retrospect, it was inevitable. pic.twitter.com/ZCNpjOApRw
— Pete Humiston (@1337_pete) May 13, 2021
What’s interesting is that while some people panic sold their BTC after Musk said Tesla wouldn’t be accepting Bitcoin as payment anymore, citing environmental concerns and saying Bitcoin’s “energy usage trend over past few months is insane,” many took advantage of this buy the dip opportunity.
As usual, Michael Saylor’s MicroStrategy announced the purchase of 271 BTC for $15 million at an average price of ~$55,387 per bitcoin and now holds a total of 91,850 bitcoins.
Jason A. Williams also went deep into the bitcoin buying spree and urged Dave Portnoy to join him on this dip and double his BTC holdings to 2 BTC.
10,000 Bitcoin has actually just flowed out from Coinbase as BTC moves from weak hands to strong hands.
SoftBank Group Corp. founder Masayoshi Son might not be one of them as he said on the company’s earnings news conference,
“There’s a lot of discussion over if it’s a good thing or a bad thing, what’s the true value or is it in a bubble — honestly speaking, I don’t know.”
But at the same time, he said cryptos popularity “can’t be ignored” like bonds or diamonds. “There’s no need to reject” the cryptocurrency either, he said. “We are always having such internal discussions.”
Amidst this price action, today, Bitcoin mining difficulty has increased by 21.5%, the largest positive difficulty adjustment in almost 7 years.
“Over a longer-term time horizon we definitely think this is the beginning phase of what’s going to be the birth of an entirely new asset class that we think will be in the trillions of dollars,” said Yassine Elmandjra, a crypto analyst at Cathie Wood’s Ark Investment Management LLC.
With much of the value “speculative,” Elmandjra said, ultimately, washout will happen, which is exactly what we experienced.
Meanwhile, Vanda’s Onatibia and Pierantoni wrote that “The short squeezes in GME and AMC were the prelude to the explosion of another Bitcoin bubble,” as retail investors poured their money into the crypto asset. According to them, a correction in crypto would push them back into equities, which are trading at a significant discount from the February highs.