Crypto trader and market analyst Lark Davis is not phased by Bitcoin’s sudden pullback.
BTC dropped nearly 20% in a single day from its local high of $52,900 after consistently forming higher levels of support during its run-up from July.
The top crypto asset is trading at $46,000 at time of writing, according to CoinGecko
In a new market update, Davis tells his 427,000 YouTube subscribers that the sudden move is commonplace for the crypto asset.
“Now, this 20% daily down candle, if you’re new around here, we really have to talk about this because what we’ve just seen is nothing out of the ordinary. It might sound crazy, it might seem scary if this is your first rodeo, but realistically, this is pretty common stuff for Bitcoin.”
The trader looks back to Bitcoin’s recent price history to show how often double-digit percentage pullbacks occur. So far in 2021, Bitcoin has endured six daily closes with at least double-digit drawbacks so far in the year, according to Davis.
Davis notes that although a steep drop like today doesn’t tend to affect the bull market trajectory in the long term, in the short term, these drawbacks can be followed by further sell-offs.
Davis looks at $42,500 and $40,000 as crucial levels of support for BTC to hold, and says more dips may come.
“Just gives you some perspective that…this is totally normal for the cryptocurrency markets, you should expect this stuff in a bull run. Volatility is the price you pay for performance.
And also, do not be surprised if we get some more downside. Now there’s a chance that that’s just a one-off, mega, epic dump candle and that things revert to their mean in the not-so-distant future. More often than not, these kinds of massive dumps come before we see more downside coming in.”
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