Bitcoin fell to the danger zone between $56,600 and $52,500 on September 5. The last time this happened, Bitcoin touched $49,000 twice in one day on August 5. BTC’s recent drop below $56,600 caused a lot of stress in the market as September is very notorious as a red month for the largest cryptocurrency. However, on September 9, it suddenly made a jump and shook the market. Let’s look at all the answers to the question of why this happened.
Diagram showing the dynamics
The cryptocurrency ecosystem market cap has risen by 2.51% in the last 24 hours to reach $2.09 trillion. BTC price suddenly jumped by about 6.52% and passed the 20 and 50 moving averages. However, the 100 MA did not miss it; it fell by 2.5%, retesting the nearest support zone near $56,600. The RSI shows bullish momentum and is fixed at 61 points. The Fear and Greed Index, which showed high fear at 26, is at 33 and shows a decrease in fear in the market.
Looking at the chart, it seems that BTC will try to strengthen its support at $56,600, but the fear of September will still give the bears an advantage. A close above this support level is very important for Bitcoin, otherwise, there is a chance that it will have to look towards $50,000 for support and a bounce.
Other market indicators
Data from IntoTheBlock shows that at the current price, most Bitcoin investors are in the money. This clearly shows that 79% of BTC investors bought the coin at a price below $56,960. This leaves 13% out of the money, meaning they are still in the red, and 8% of investors bought at the current price.
Around 4.55 million BTC addresses holding a total of 2.26 million bitcoins bought the asset in the price range of $55,507 to $61,396 with an average purchase price of $58,690. The main resistance is ahead at $60,000. There are 6.93 million addresses holding 3.14 million BTC with a minimum purchase price of $61,396 and a maximum price of $72,500. This price gap of $11,000 has created a huge resistance.
Liquidation data
In the last 24 hours, about 39,647 trades were liquidated, with the total amount liquidated being $128.42 million. Interestingly, just two days ago, the liquidation data consisted of long trades. However, the current data shows that the market has liquidated short trades in the last 24 hours, which is a bullish signal.
The largest short liquidation was in Bitcoin at around $43.85 million, followed by ETH at $31.98 million. Interestingly, Dogecoin, which closely follows Bitcoin’s price action, also had a short liquidation of $2.57 million.
How Michael Saylor Made Bitcoin Popular Today?
The founder and chairman of the famous Microstrategy, Michael Saylor, was invited to CNBC on September 9 to discuss Bitcoin. When asked about his opinion on the profits generated by Bitcoin, he did not hold back and clearly shared the profits his company is making with BTC. He said that Microstrategy has bought about $8.3 billion worth of Bitcoin since August 2020. He said, “We used Bitcoin and we were up 825%, while the number one stock in the S&P was up 821%. So we beat every company in the S&P using our Bitcoin strategy.”
Asked about the recent outflow of funds from the country in the amount of $1.2 billion Bitcoin Spot ETFsSaylor responded that he thinks this is generally a good thing because it creates more demand. Bitcoin is smart money and it is the most liquid and fungible free market in the world.
Bitcoin Price Prediction
Speaking about Bitcoin, which is called digital gold, Andres Ross asked Saylor about the behavior that Bitcoin exhibits during panic. Saylor responded by explaining that if you are a long-term holder, you are in the money as Bitcoin moves at an annualized rate of return of about 44%. And even if you are a short-term trader, the market offers plenty of arbitrage opportunities.
According to Saylor
If you can hold Bitcoin for more than 4 years, you will get excellent performance with its volatility. At the moment, Bitcoin is only 0.1% of the world market cap, and this will be 7%.
He shared his Bitcoin price prediction for the next 21 years. According to him, Bitcoin will be worth $13 million within 21 years and all you need to do is hold some Bitcoin.
Result
Since this interview aired, Bitcoin has started to show positive momentum. If Michael Saylor is so confident in Bitcoin, the market will follow suit. Bitcoin showing a sudden move up by about 7% in the infamous month of September is a sign that BTC has evolved over the past decade. Over the past few years, we have seen that whenever there is panic in the market, it creates buying opportunities. This is how Bitcoin whales accumulate assets and fill their bags.