Investing.com – After a few days of strong rallying, Adriat made his ugly face in the market today, losing $ 3,000. The market now remembers that cryptocurrencies have to adapt otherwise they are destined to collapse over and over again.
The reason behind this decline was the traders and investors, who saw their Bitcoin accounts grow strongly in 2020, and suddenly decided to quit today to take advantage of the White Friday opportunities.
The same thing happened in 2017, when Bitcoin peaked at $ 20,000 before Christmas. This psychological number has prompted many investors to go out, make a profit, and enjoy a Merry Christmas. And after the liquidation, it retreated in the form of over $ 3000, so the question now is whether a bigger drop is on the way, or will the cryptocurrencies correct their move?
On the one hand, today is different from 2017, thanks to Bitcoin’s merger with the global financial system. In addition to a stronger tightening of regulations on trading platforms, hedge funds and ETFs. This makes the cryptocurrency king much more diverse than it was in 2017, at the height of the bubble.
On the other hand, it remains owned by small investors who dream of amassing wealth quickly. They envision an increase of 20 thousand, 50 thousand and finally 100 thousand, but at the same time they are terrified of any downturn and rush to exit the market and make a profit. Such people are motivated by what is known as the “psychological state of the herd”. And they respond to any event, no matter how small, because they see that “there is no smoke without fire.” This means that they leave the market with every fluctuation, so that a simple correction can turn into a disturbance. Unlike hedge funds, they do not lag behind such fluctuations.
All in all cute, but not surprising what she’s been through. From the outside, it appears to be a get-rich-quick opportunity, and it is controlled by traders and small investors, who fear for their capital, and not by established institutions that gamble and conduct extensive price studies that affect the morale of their audience. Today, there is a new test for Bitcoin, for the world to see if it will resume its major collapse, witnessed in late 2017 and early 2018.
Though it remained volatile today, after the collapse at the beginning of this week.
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