In the last 24 hours, Bitcoin has been dumping. This is after weeks of sideways trading and indecisiveness from the asset. What triggered the fall? An 11-year-old Bitcoin wallet moved coins worth $500K to Coinbase. Since the wallet has not moved Bitcoin since 2009 and is owned by one of the few original miners, there was speculation that this could be Satoshi Nakamoto. Yes, the inventor of Bitcoin.
At the prospect of the father of Bitcoin dumping, some investors quickly cashed in causing a flash crash. From $9,600, it fell to $9,100 in a matter of minutes. A number of fact-checkers later looked at the said wallet and confirmed that it was not Satoshi’s and Bitcoin bounced back up to the $9,500 level.
— Crypto.Jei (@CryptoJei) May 20, 2020
But the coin had just sent a message to the smart investors. Sentiments are bearish and investors are uneasy. Since the halving faltered, many have been expecting a dump. It only took a wild rumor and a small transfer and the bears dumped a couple of billions. Also the whales want to see Bitcoin under 9K. This way, they can reaccumulate before the coin can reach highs of the much anticipated $10K position.
At the time of writing this, Bitcoin has lost around 4% and dropped to the $9,200 support. The bulls are clinging on this position with a bleach guaranteed to see the coin drop to under $9K.
A Bitcoin Pullback Is A Good Thing
While a retracement in the face of it is a bad thing and sees investors lose money, in the long term it plays in favor of the smart money. Smart investors buy up at these low prices and by reaccumulating and growing demand, they push prices back up. Bitcoin is one of many assets that does not rally in a straight line, for every rally, follows a retracement before a further push to higher highs.
A drop to the $8.8K support maybe what is needed before the bulls can make a push for the $10K position. But only if investors stay cool, any anxiety and the cryptocurrency could dump all the way to the $7K lows.