Why there’s a huge cliff face in the Bitcoin Price only to go back to normal?

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Every time we see the trading chart of Bitcoin on a website or in a price analysis video, we see this cliff-like trend in the chart. The cliff is the part where bitcoin hits the lowest price and comes back to its normal price within a day or so. But why does that dip take place?

It’s a free market

It’s a free market, and the trading strategies and secrets are hidden from the general public so we can only guess what the reason can be. Maybe wealthy investors sell a lot of their coins, causing a fall in the market, and once people see this, they follow and then the rich investors buy more coins at cheaper rates.

Technical Bots

There could be bugs in the charts that show a $300 drop and a rise within 90 minutes. This can happen because there are bot algorithms that trigger each other to cause these fluctuations in the price.

Big Whales eat the fish!

Sometimes big whales, the ones that have a massive amount of bitcoin sell below the market price, pulling down the cost of the market and then buy back again when the price is much lower. This helps them in making smart investments.

Gambling on prices can get rough

Sometimes people like to gamble with leverage, but what they forget is that this is a hard way to learn that house always wins. The reason being they can see the cards and drive the prices where they want to win the game. House here stands for the exchange platform and leverage being the future price.

What are your thoughts on this? Let us know in the comments below.

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Vineet Chaudhary
Vineet Chaudhary
Vineet Chaudhary is a content writer with computer applications as his background field. His interests range from writing and photography to going out for trips and rides on weekends.

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