The sell-off, which saw bitcoin lose 10% of its value in a matter of hours, was taken as by many bitcoin and cryptocurrency market watchers as temporary correction.
“Crypto prices can show sharp fluctuations, so the main thing to know is that this stage was needed to continue the rally,” Alex Kuptsikevich, FxPro senior financial analyst, said via email.
“Technical indicators have been in the extreme overbought territory for too long. The rally started to choke up on the way to $20,000. This is a very serious psychological and technical level of resistance for the market, and there was no doubt that this obstacle would test investors’ optimism.”