Man That Flash Crash Was Scary Yesterday

whatageek (75)in LeoFinance • 3 years ago

Yesterday was a pretty stressful day for the crash if you watching the market. We are talking 30% plus drops on some coins in minutes. For me I remember refreshing coinmarketcap and seeing bitcoin down 2 more k during the refresh. Bitcoin went down over 10k and other coins followed going down even more. It was a brief drop but it was hard and fortunately we recovered ot about half of were the drop was. This is still a lot but for us in crypto for a long time 10% isn't that big of a deal. But a drop of 20% in minutes does shake even the veterans.

So What Happened?

Yesterday was the day that Bitcoin officially became a currency in El Salvador. There was also people posting they everyone should buy 30 dollars of bitcoin yesterday. These two things caused a lot of hope in the market and I think a lot of people leveraged long thinking we are going to the moon.

Buy The Rumour Sell The News

However what happened was the opposite of what the leverage traders were hoping for, There is a saying crypto (and stocks) that you buy the rumour and sell the news. This would have been a classic example of that as people were buying before the day and then a lot of people sold when the event actually happened. This could explain why the price went down but not why it went down so much so fast.This was because of the long squeezes.

Long Squeezes

Since there were so many leveraged longs in play when the price started to drop these longs got squeezed out and more people had to sell to cover. I'm guessing you probably had people with 10x-100x longs which is very VERY risky and something you should only do if you are okay losing everything really fast. This is high risk gambling and when a price drops people will loss all their bitcoin. Yesterday the long squeeze took 2 billion dollars in minutes. This kept dropping the price and this is why you saw such a sharp spike in such a short period of time.

I'm Extra Antsy

This has happened before this year and usually I would not sweat it. But as we are nearing the time that is close to a possible bear market according to the S2F model I'm a little skittish. I was her in 2018 at the drop and I know how bad it can get. I do want to get a lot out before then if that happens and although I think it will be November/December if it happens (maybe January/Feb) there is no guarantees and we can enter a bear at any time. Maybe it doesn't even happen but until I get enough out I'm on high alert.

Markets Calm Today

Nothing exciting happened today but it is good to see the bleeding stopped. I hope to see us go up in a couple of days as I'm still nervous the drop continues and Septembers are usually bad for Bitcoin. Time will tell, but I'm checking coin market cap more than I want to over the couple of days.

Leo Is Still Here To Stay

The good thing is no matter how bad the crash is I can still post on Leo and keep making my money for the next run. I plan on buying a lot of things if the market does go back down to low numbers so there is always a positive in the market depending on how you look at it.

Time will tell were we head from here and I hope to see that climb to ATH (maybe even the 100k) in the months to come but yesterday did shake me a bit.