Why Did Bitcoin Drop to $90K After Hitting an ATH of $104K?
The crypto market is known for its volatility, but Bitcoin’s recent drop from its all-time high (ATH) of $104,000 to $90,000 has left many wondering: What happened?
Let’s break it down:
1. Profit-Taking at ATH
When Bitcoin broke through $100K, a psychological milestone, many investors who had been holding since lower levels decided it was time to take profits. This wave of selling created significant downward pressure.
2. Overleveraged Positions
As Bitcoin surged past $100K, the derivatives market saw a spike in leveraged long positions. When the price began to dip, these positions were liquidated, exacerbating the sell-off. This cascade effect is common in highly-leveraged markets like crypto.
3. Technical Resistance and Market Psychology
$100K was not only a psychological milestone but also a technical resistance level. After Bitcoin surpassed $104K, it quickly met strong selling pressure, which caused the price to reverse. This behavior is typical as traders anticipate corrections after major breakouts.
5. Whale Activity
On-chain data revealed increased activity from Bitcoin whales. Large holders moved significant amounts of BTC to exchanges, likely preparing to sell. This signaled the market to brace for a correction.
What’s Next?
While the drop to $90K might seem dramatic, it’s essential to put things into perspective. Bitcoin remains in a bullish macro trend, and corrections are part of its price discovery process. Historically, Bitcoin has shown resilience after similar pullbacks.
For long-term investors, this could represent an opportunity to accumulate. As always, it’s crucial to do your own research (DYOR) and understand your risk tolerance before making any moves.
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