Bitcoin’s sharp price drop from $44,000 has all the makings of a buy-the-dip scenario after leveraged longs get flushed out.
Bitcoin (BTC) price finally witnessed a significant 7% pullback on Dec. 11 as multiple indicators flashed sell-signals and traders booked profits. Bitcoin’s ability to hold above $42,000 will determine whether this crash is a buy-the-dip opportunity or a general market reversal.
The sharp BTC price drop observed on the daily chart corresponds with a sudden 6.5% drawdown and over $300 million long liquidations across the cryptocurrency market.
Zooming to the longer 1-day candle timeframe, however, this movement appears as a minor retracement in a more extensive bullish trend established over the past few months. Moreover, the relative strength index (RSI) has retreated back into neutral territory below 70 on the daily timeframe.
