Bitcoin’s recent sell-off created quite a panic among investors. It is in a recovery mode now and trading around $9,157 currently.
The US Federal Reserve is resorting to ruthless printing of fiat money. According to several top hedge fund managers, a lot of that money is flowing into investments in BTCUSD.
Why did Bitcoin suddenly drop in value?
A prime cause of Bitcoin’s drop was the herd-mentality bias. It is a sort of bias, wherein one investor starts doing what another investor is doing. Driven by fear and panic, it can be quite disastrous.
The movement of 50 Bitcoins from a 2009-era wallet created headlines recently. Since then, people started speculating that maybe the original creators no longer trust the potential of this crypto.
Bitcoin is at an attractive valuation now
Source: TradingView.com
The BTCUSD daily-timeframe reveals that Bitcoin bounced off the crucial support level at $8,927. This support level was retested thrice in the past and honored, suggesting BTCUSD bounced back all three times.
Moreover, below this line is the 23.6% Fibonacci retracement level for BTCUSD. In case BTC falls below the support, the Fibonacci retracement would come into play.
A short burst till $10,000 might happen soon for BTCUSD
- The 23.6% Fib. retracement would act as a strong rebound, as investors now believe Bitcoin to be attractively valued.
- Moreover, as historical trends point out, the support level at $8,927 was last tested on May 5. The conditions were similar back then as well. And on May 8, BTCUSD touched $10,000.
Therefore, if all other macroeconomic factors stay the same, BTCUSD could race past $10,000 in a matter of few trading sessions.
