By Ollie H - Cryptocurrency Broker - 05-08-2021
Like most cryptocurrencies, Bitcoin (BTC) investments fell drastically this year. The crackdown in China, amongst other news, made a crypto crash devastating for many investors who started buying Bitcoin around its all-time high in mid-April.
The recovery process for each cryptocurrency since has varied; however, the typical pattern is showing crypto assets struggling to gain the same momentum again. In more recent days, we see slow but steady inclinations in the charts of popular cryptos, BTC especially.
In recent news within the crypto community, there was a 10% drop in the price to buy Bitcoin on Monday. The sudden fall did not last as the crypto giant recovered quickly and even surpassed the long-awaited $40k goal. Despite the green candles spiking positivity to BTC investors, many traders are cautious and believe that now's not the time to call for celebration.
There is uncertainty amongst bearish traders as they are concerned that the asset is currently overbought. On the other hand, some investors see this rise in price as the beginning of a new bull run for Bitcoin buying.
The recent 10% fall followed by a spike in price is a significant indication that this could be due to people "buying the dip." The phrase "overbought" is used when many investors purchase an asset, causing the price to shoot up in the short term without a supporting investment rationale. It can also be seen as when a crypto asset reaches the overbought region; it would be trading more than it's worth.