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Bitcoin Reaches $25,000 as $1 Billion Liquidated in Last 3 Days: Is It Good Time to Panic?

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Mon, 13/06/2022 - 8:21
Bitcoin Reaches $25,000 as $1 Billion Liquidated in Last 3 Days: Is It Good Time to Panic?
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Bitcoin's plunge below $25,000 was not the most expected thing by the market as we recently experienced a massive sell-off in May, but it seems that traders and investors are not ready to support the bullish momentum on BTC that we saw previously. But should the market start panicking?

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Analysts, traders and even economists from both crypto and traditional finance were mostly expressing bearish sentiment prior to the drop below $27,000, but the historical analysis of Bitcoin and other cryptocurrencies suggests that the correction is far from being completely over.

Bitcoin Chart
Source: TradingView

After the great bullrun of 2017, Bitcoin entered a bearish cycle that resulted in more than 80% correction from the local top, confirming the cryptocurrency's status as one of the most volatile assets on financial markets.

In our case, Bitcoin has lost "only" 64% of its value and can easily drop further, especially after ignoring almost every support line it had in front of it since reaching $70,000.

When should the market worry?

The real problem for the digital gold may appear if investors decide to push it below the 2017 ATH of approximately $19,666, as it would put Bitcoin at more than 70%, causing a massive capitulation of traders that entered right at the beginning of the new bullrun on the market.

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If Bitcoin "decides" to make another 80% retrace like it did back in 2018, traders and investors will be able to buy it at around $10,000. Unfortunately, Bitcoin's return to the sub-$15,000 zone will dissolve the "decreasing volatility" theory that referred to the maturation of the crypto market.

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