Bitcoin hits $9,000 before dropping back to $8,000 in minutes

Yesterday (May 30th)  the price of Bitcoin (BTC) reached an all-new 2019 high of $9,000 in a powerful recovery from around $8,500.

However, within mere minutes of reaching this milestone, the price plummeted from $8,200, falling as low as $8,000 on Bitstamp.

Many crypto analysts generally believe that this sudden rally of the price of bitcoin and its subsequent dump to be a case of a fakeout breakout which could have been fueled by the liquidation of contracts on BitMEX.

Could This Have Been A Case Of Manipulation?

Despite the fact this dramatic decline in the price of bitcoin at a pace in which it crashed as soon as it peaked at $9,000 was vastly unpredicted by many traders, the trend resembled a classic fakeout pattern.

Director of trading at Investopedia, James Chen explains:

“Fakeout is a term used in technical analysis to refer to a situation in which a trader enters into a position in anticipation of a future transaction signal or price movement, but the signal or movement never develops, and the asset moves in the opposite direction.”

Many technical indicators pointed toward continual momentum for the OG cryptocurrency in the near-term. However, as the sudden sell-off happened, both short and long contracts on BitMEX were liquidated, which further accelerated the rate of bitcoin crashing and the cryptocurrency market on the whole.

A cryptocurrency trader who is known to the crypto community as “Mayne” stated that in the short-term it is crucial for Bitcoin to defend its  $8,200 support level:

“$8200 level is key for the bulls IMO if it’s lost I think we fall much further. As you can see, it has been a very important level for a while. A potential short, not sure if we get it would be a lower high at $8700. If we can regain $8700, I think you get net long.”

As a result of bitcoin’s rampant volatility in the past weeks, many traders have stated that they remain bullish on a macro level but also remain uncertain as to the short-term trend of the top cryptocurrency.

Based on a variety of technical signs, many traders have predicted that the bitcoin price is showing signs of recovery. This is of course if the cryptocurrency holds above the $8,200 mark and is supplemented with notably high volume.

Another trader stated:

“I’m not smart enough to know what happens next, but I’m smart enough to know that I don’t know. I’m still macro bullish – we are officially in a bull market. On a grand scale, I’m favouring longs over shorts from here on out, but not here, not now. I will be patient and wait.”

As a result of Bitcoin’s decline, other top 10 altcoins such as Ethereum, XRP, Bitcoin Cash, EOS, Litecoin and Binance Coin all recorded an average drop of around 8 to 9% against the U.S dollar.