Here’s Why Bitcoin (BTC) Is Dropping: Top Binance Trader Explains

Here’s Why Bitcoin (BTC) Is Dropping: Top Binance Trader Explains

Tue, 19/03/2024 – 12:19

Here's Why Bitcoin (BTC) Is Dropping: Top Binance Trader Explains
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Bitcoin is on a downswing that not many anticipated. A top trader from Binance sheds light on this trend, suggesting it is about market behavior. When Bitcoin’s price climbs, many traders move away from the usual spots at which they buy and sell. Instead, they chase after trending coins, which often change daily, by using borrowed money to bet on these coins – specifically hyper-volatile meme coins.

What’s behind Bitcoin price dip

The idea is, when Bitcoin and similar big-name cryptos go up in price, people get excited about making quick profits. So, they rush to invest in smaller, more volatile cryptos, like meme coins, mostly because many anticipate bigger, faster returns than the slow and steady growth of something like Bitcoin.

BTCUSD
Bitcoin/USDT Chart by TradingView

But this behavior can cause problems. As more people buy these meme coins on leverage (using borrowed money to multiply their buying power), it means less activity on the main Bitcoin market. Without strong buying interest to keep pushing the price up, Bitcoin starts to lose its momentum, and that can lead to a drop in price.

Bitcoin’s price analysis

Right now, Bitcoin is facing a tough time. The chart shows it is below where lots of traders were trading it recently, which means there is less confidence that it will go back up 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 like a floor that the price does not want to fall below. If it does, the next spot to watch is around $51,802, where the 100-day moving average lies.

As for the ceiling that Bitcoin needs to break through to start climbing again, it is up at about $64,000. If Bitcoin can push past that, we might see it start to rise toward recent high points again. But, if it drops below those average lines we talked about, it could be a sign that the price might keep falling, or at least stay low for a while.

Published at Tue, 19 Mar 2024 12:50:00 +0100

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