Bitcoin bounces back, approaches $16k, is the crash over?

bitcoin-crash-technical-trader

Friday was a big day in the cryptocurrency world as Bitcoin dipped into the $10,000 range – 50% off it’s high of over $20,000 a little over a week ago. As Bitcoin tumbled so did just about every cryptocurrency on the market with Ethereum and Litecoin making the bulk of the news since these are the two most popular altcoins right now.

Ethereum dipped into the mid $400’s while Litecoin went as low as the mid $100’s. There was a time on Friday (yes, just yesterday) where you could but Bitcoin for around $10,000, Ethereum for $450 and Litecoin for $150.

The most common explanation for yesterday’s massive price movement was profit taking. With Bitcoin staying so high for so long, many investors just decided now was time to lock in their profits. At the same time, December saw a huge increase in the number of brand new cryptocurrency investors, many of whom were not prepared to watch their investment go down so quickly after buying in the $19,000 range.

It is also not hard to believe that a fair number of these new investors panicked and sold Bitcoin as it fell causing it to take an even deeper dive. On both Reddit (/r/bitcoin) and Bitcoin Talk (a popular Bitcoin forum) veteran crypto investors made fun of all the new investors that have jumped on the Bitcoin bandwagon, here’s one of my favorite images that’s making the rounds right now:

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Right now I think there are two camps forming in the Bitcoin world. For veteran investors that have been in BTC for a while now, these dips come with the territory, they’re used to them, and there’s even a term for what do do in these situations – HODL. For those who don’t know – HODL stands for, hold on for dear life, i.e. don’t sell.

On the other side are new investors. People who sat around the dinner table during Thanksgiving, heard a few family members brag about how much money they made off of Bitcoin and decided they had to jump in. Many of these new investors live in a world where Bitcoin at $17k is about as low as they’re comfortable with – they’re looking for the run up to $30k so at close to $10k yesterday the sky was falling for them.

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As of now (9:48AM PST on Saturday December 23rd to be exact!), Bitcoin has made it’s way back up to the mid $15,000’s and there’s a growing contingency of investors that seem to feel like this is the beginning of the next rally up and beyond $20k. Many people are now starting to question if it’s really fair to even call this a crash, I think this tweet does the best to illustrate this point:

dec22-bitcoin-crash

So like the title of this post says, Bitcoin has bounced back over $5,000 up from it’s low and $16,000 is in sight. My question is – is the crash over? Was this even a crash? Or is this just a momentary dip on Bitcoin’s way up to fresh new highs? 

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