Bitcoin is in a recession that not many anticipated. TO top trader of Binance sheds light on this trend, suggesting that it is all about market behavior. When the price of Bitcoin rises, many traders move away from the usual places where they buy and sell. Instead, they chase trending currencies, which often change daily, using borrowed money to bet on these currencies, specifically hypervolatile meme currencies.
Bitcoin is in a recession that not many anticipated. TO top trader of Binance sheds light on this trend, suggesting that it is all about market behavior. When the price of Bitcoin rises, many traders move away from the usual places where they buy and sell. Instead, they chase trending currencies, which often change daily, using borrowed money to bet on these currencies, specifically hypervolatile meme currencies.
What’s behind the Bitcoin price drop?
The idea is that when Bitcoin and similar big-name cryptocurrencies rise in price, people get excited about making quick profits. Therefore, they are rushing to invest in smaller, more volatile cryptocurrencies, such as meme coins, mainly because many anticipate greater and faster returns than the slow and steady growth of something like Bitcoin.
But this behavior can cause problems. As more people buy these meme coins with leverage (using borrowed money to multiply their purchasing power), it means less activity in the main Bitcoin market. Without strong buying interest to continue driving the price up, Bitcoin begins to lose momentum and that can lead to a price drop.
Bitcoin price analysis
Right now, Bitcoin is facing a difficult time. The chart shows that it is below where many traders were trading it recently, meaning there is less confidence that it will rise again soon. We can see that there is a bit of a safety net around $56,260; This is the 50-day moving average, which often acts as a floor below which the price does not want to fall. If so, the next point to watch is around $51,802, where the 100-day moving average lies.
As for the ceiling that Bitcoin needs to overcome to start rising again, it amounts to about $64,000. If Bitcoin can overcome that, we could see it start to rise again towards recent highs. But, if it falls below those average lines we talked about, it could be a sign that the price could continue to fall, or at least stay low for a while.
