In another display of its familiar volatility, Bitcoin jumped to $10,400 on June 1 only to meet hard resistance and fall to $9,450 within the same day. By June 2, the top crypto had fallen to $9,725, and even dipped as low as $8,600 on certain exchanges. A loss of more than 10% within a given day might seem shocking even to those familiar with how the crypto market fluctuates, but a well-known industry expert elaborated on what exactly went on during those tumultuous few hours.
Bitcoin’s losses are mainly attributed to stop losses, says industry expert
Matthew Ficke, OKCoin’s head of market development, explained that the dip in prices was a result of standard trading activity that can be seen in any market, rather than being a sign that interest in Bitcoin is tempered or that the crypto experienced a hard stop. Sharing some of his experience, Ficke pointed out that the fall can be attributed almost exclusively to short liquidations. These cases are also known as stop losses, where traders set a price level and sell the asset as soon as it reaches it in order to avoid losses.
Ficke instead urged market participants and crypto enthusiasts to ponder the big picture, which looks reasonably optimistic considering Bitcoin’s increasing appeal as a hedge and the much-awaited launch of ETH 2.0. Besides a rise in acceptance of the token as a mainstream asset that bodes well for its long-term prospects, Ficke also singled out the $10,400 level as a key resistance that Bitcoin has struggled with throughout the past year, saying that it might have also been a contributing factor to the downwards push.