June was expected to be Bullish, it was rumoured to be ride in narrative this month with Hong-kong Narrative, LSD narrative, Nvidia Ai narrative. But we saw a unexpected dump in #BTC it was Hovering Around 27k Dropped to 25k level.
But why The Dump Happened? Lets Discuss
Act 1 - The Reasons
While we saw the coin getting one after another red candle Bitcoin didn't suddenly dropped, the dump was processed few days ago
A. Brokedown From Triangle
Before the dump happened Bitcoin Created a Triangle which it eventually was trying to break. In 4hTF we can definately see Bitcoin going down and it eventually dropped after breaking the support.
B. Open interest rise
Before dump we saw another intersting status. Bitcoin was slowly drowning and open interest was rapidly went up. Which was a claer indication of a upcoming dump.
As Per Investopedia
"an increase in open interest along with a decrease in price confirms a downward trend"
C. SEC Lawsuit
The Dump was heavily fuled by SEC lawsuit drama. SEC put a lawsuit against Binance And Cz over securities. We won't talk about that in details but the incident came as a surprise and all Crypto people got a fear and many of traders liquidate in process.
Act 2 - The Aftermath
The reasons were clear but the Aftermath was brutal many of us saw rapid down movement in several Crypto including Bitcoin and Ethereum.
A. Inflows & Outflows
People were furious there was a enough FUD that people were withdrawing their funds from exchanges. Some people saw it as a opportunity but for majority of the people out their Cryptos From CEXs
B. Liquidation
Every dump comes up with Liquidation. But long got $100million plus liquidation in minutes next hour we got another batch of Short liquidation.
C. Fear & FUD
The Crypto Fear and Greed Index sums up the day. Before the D-day the overall index was 52 but it landed 44 on next Day.
Act - 3 How To Protect Our Funds
Protect our funds in those situations is the most difficult part in trading. One small mistake and we might get into a big trouble. Here're some tips to follow
A. Use Stop-loss In Every single Trades
B. DO not Trade futures in those hours / that Day.
C. Maintain Your Leverage under 3 and put trailing stop-loss.
D. Don't overexpose yourself if you in profit that moment and its a short term Trade close it.
This article is not sponsored by any third party or Binance itself. The names are used solely for informative purposes. We do not endorse any trading practices that could lead to financial losses for users. Please conduct your own research before investing in digital assets.
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