Bitcoin price in dollars has dropped

The Bitcoin price in US dollars has dropped by 20% in the last 24 hours. There are real sales on the cryptocurrency market today. Many altcoins are even worse. Ethereum fell by a quarter, Litecoin even by 30%, and Stellar, which made a profit of 100% in recent days, today lost 20% of its value. Most altcoins are in a loss of 15-30%.

Bitcoin price in dollars as the dollar is strengthening, and financial markets are falling

This is what it looks like when Bitcoin commands downturn. The market is strongly tied to this cryptocurrency. When Bitcoin falls appropriately, all things follow. The bullish movement of the US dollar is also mostly responsible for these sales. The US Dollar Currency Index, which tracks the US currency’s strength, has finally jumped out of the falling wedge formation in recent days, and the markets immediately responded with a fall. The good news is that it was only a local formation, and the dollar is still in a strong downtrend, but it should continue to strengthen in the coming days.

Bitcoin is, of course, part of the financial markets. Through platforms such as CME or Bakkt, institutional investors goes for it. They also consider cryptocurrencies to be risky assets. Besides, the cryptocurrency market has grown almost continuously over the last five months, so it is no wonder that the institutions began to cancel their positions at the first sign of trouble.

$2.7 billion worth of liquidation in futures markets

The last two days’ slump is also responsible for one of the giant waves of liquidation in history. On futures platforms, where it is often possible to trade with leverage up to 1:100, positions totaling $2.7 billion went bankrupt, reports the Cointelegraph.

Much higher profits can be made when trading on leverage. With an influence of 1:5, for every profit percentage, the trader earns 5%. Unfortunately, the disadvantage of such trading is that the absolute position can be liquidated in a more considerable fall. With the mentioned conservative leverage 1:5, it is enough for Bitcoin to drop by 20%. Therefore, you will have zero in your account. And that’s why Bitcoin to USD has dropped today.

When liquidating the LONG position, Bitcoins are sold. It pushes the price even lower. With a larger overflow, a cascade effect is created. It can suppress the price very profoundly. However, such events are advantageous. Mainly because the market is cleared of repackaged positions, and growth can continue.

As deep as we can fall, it is evident that Bitcoin to USD will continue this correction for some time to come. Here are two possible levels you could bounce off:

It is generally not recommended to trade cryptocurrencies on leverage. Even without it, they usually make superior numbers. Borrowing to make even greater profits is pure greed, and then it ends badly.

This is just one of the many significant corrections that will come in 2021

And what to do when the cryptocurrency market is falling so sharply? Bitcoin price in dollars fell and the dollar has strengthened. On the contrary, similar corrections are relatively common, and we have several here every year. Mostly this is an excellent opportunity to buy for a lower price. Currently, the cryptocurrency market is in a parabolic upward trend. It means that the growth rate is gradually accelerating. Even during the most considerable growth (e.g., in 2017), the market went through several significant adjustments. Similar to the one we have been monitoring since Sunday. We should expect several major corrections of 30-40% during 2021. This is the first one, and there will be more to come.