Bitcoin and Crypto Suffer Bloody Friday – Here’s Why That’s Normal
Bitcoin and crypto are struggling after a hot August.
Covered:
- Bitcoin and cryptocrash
- Why it’s nothing to worry about
- Bitcoin zoomed out
Bitcoin and crypto crash
Bitcoin and crypto were caught by surprise, and were hit hard on Friday. Bitcoin (Ticker Symbol: BTC) is down 10% in trading in the $21,100 USD area, while the global market is down nearly 9% with a total market cap of just over 1 trillion. Bitcoin had recently reached 25k USD.
The hardest hit among big-name altcoins in the last 24 hours include Filecoin (-20%), Cardano (-14%) and Fantom (-15%). But no coin remains unscathed during the crash.
A look at the top 100 reveals that the only coins flashing green are of the stable variety. DAI, USDC, etc., are all up, but by around 0.3 percent. When stablecoins are the only ones in the green, you know you just had a pretty bad day.
$BTC basically did the same at 40k, then 30k, now at 20k, and calls for the start of the new bull run were made at every single level.
It looks like someone screamed “fire” in a crowded theater. pic.twitter.com/a5vGSaiLFj
— Dylan LeClair 🟠 (@DylanLeClair_) 19 August 2022
Friday’s crash surprised some after the strong month of August. But it was no coincidence that the huge losses occurred during a Friday options day. Mid-month high-impact wipeouts are just a thing now. Some just hit harder than others.
Why it’s nothing to worry about
Unfortunately, just because the losses were so large so far in 2022, a brief rally does not mean we are not subject to profit.
The ones we bought at 19k obviously thought it was a good time to sell at over 25% profit. May seem short-sighted, but then again, it’s Bitcoin. Some people are just in it for a quick buck, your inflation thesis be damned.
Still, there are some really good signs that this crash shouldn’t be a cause for concern.
The Fear And Greed Index is still flashing “fear”. However, it is up significantly from June when it flashed a 6 (“extreme fear”). More importantly, today the index is actually up from Thursday.
Maybe after this day is over the number will change a little. But 33 remains after Bitcoin and Ethereum both underperformed during the week. Not to mention, there was a bunch of fear around HUSD, and FUD around Cardano and Vasil.
Bitcoin zoomed out
All in all, things are looking good. Especially if you zoom out. Taking a look at Bitcoin on the year-long chart, we can begin to see a familiar pattern.
Last year we saw a drop towards the end of August after a similar warm run. September saw a fairly large decline – around “Bitcoin Day” – but saw a huge run-up again after the futures ETF was announced.
Of course, it all fell apart this year, but it was fun while it lasted. And most of us would take it at this point.
This September will not have a catalyst like Bitcoin Day, so it will be interesting to see how the market reacts. Similarly, autumn has nothing Bitcoin related. However, it is the ETH merger to look forward to. Also, Vasil will actually happen at some point. So that’s it.
Not to mention, October and November are generally strong months for markets in general. So all signs point to a solid fall, but with some likely bumps in the road, like the one we saw today, going forward.
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