Daily Market Recap - BTCUSD Takes a dive

In a feverish market attentive to the slightest announcement, the price of Bitcoin has lost more than 20% in less than two days in reaction to a new warning from the US Treasury Secretary and after tweets from Tesla's whimsical boss, who is a fervent promoter of the cryptocurrency.

Everything is going very fast in the extremely volatile crypto market. After consecutively beating record highs over a two-month timeframe first at the 20,000, 30,000, 40,000, 50,000 dollars last Tuesday, then nearly reaching the 60,000 dollar mark on Sunday around 8 pm (remember that this market is open 7 days a week and 24 hours a day), the price of Bitcoin has since been falling violently.

From nearly $58,352 on Sunday evening, it fell to $44,892 shortly after 11:00 a.m. on Tuesday, which is a decline of 23%. On the scale of the market of bitcoin which recently exceeded 1.000 billion dollars, it is 249 billion that was gone in smoke in only 38 hours.

Galvanized by the growing interest of institutional investors in recent months, and by Tesla's announcement of an investment of 1.5 billion dollars in early February, Bitcoin has now reached a sudden halt.

This comes after a question expressed on Twitter by the one and only Elon Musk. During an exchange with the (ultra-orthodox) economist and businessman Peter Schiff, Tesla's boss, who is now seen as one of the promoters of cryptocurrency – after his role behind the rise of Dogecoin - finally conceded that, in his exact words, “the prices of bitcoin and etherum ”seem high (lol).

After having held on for a few hours, the crypto market began to fall. “It is not a very good sign for a so-called 'safe haven' asset to follow a man's instructions to the letter,” stressed Swissquote market analyst Ipek Ozkardeskaya in a note.

On Monday, it was the turn of Janet Yellen, former president of the American Central Bank (Fed) to develop her opinion on Bitcoin in an interview with the New York Times. “It's a highly speculative asset,” she said, adding: I'm concerned about the potential losses that investors could suffer.

In addition to investment funds and a few companies like Tesla, many individuals are buying fractions of bitcoin, taking advantage of the many platforms that have flourished in recent years. Market observers, who welcomed the professionalization of the market at the end of 2020, noted that public interest was reaching levels last seen in 2017 when prices had soared before collapsing. “The media machine is running at full throttle,” commented one anonymous seller of cryptocurrency.

(Chart Source: Tradingview 23.02.2021)

Given Bitcoin's dizzying performance, the significant declines of the last two sessions only erased the escalation of the previous eight days. The bearish momentum at work since Sunday evening also seems to be drying up as Bitcoin has already recovered nearly 10% from its low point and is trading around $48,800 at 3:30 pm.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.