After the recent rally, as the momentum weakened, Bitcoin suddenly collapsed by 8%

The cryptocurrency space can be highly volatile for traders, and over the years, Bitcoin (BTC) has proven to be one of the more volatile cryptocurrencies.In the past few days, the world’s largest cryptocurrency by market value has successfully made a comeback, but Volatility returns Today again. This fluctuation last appeared in November 2019.

Key driving force

At around 5 a.m. Hong Kong time, the cryptocurrency plummeted 8% in 45 minutes, down to $9,320 per coin.

Although the collapse of Bitcoin did surprise many markets, the cryptocurrency rebounded from these levels and finally reached the $9,598 coin a few hours later. Emmanuel Goh, responsible for cryptocurrency derivatives tracking company Skewed, means The sharp decline in BTC may be a technical move that may have been triggered after a highly leveraged derivative position was required.

Despite the dramatic decline, it is worth mentioning that so far this year, BTC is still up 20%. At this time last year, the token was already in an impressive upward trend.

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The surge in Bitcoin so far this year may be due to many people now seeing it as a legitimate hedge against financial market turmoil. As people continue to worry about the closure of many factories in the country, the coronavirus outbreak in China has swept markets around the world.

In this case, BTC has become the preferred hedging tool for some investors who wish to protect their capital. In the next few days, investors may pay close attention to the price trend of Bitcoin.

What do you think?

Featured image: DepositPhotos © KostyaKlimenko

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