- Bitcoin price flash crash below $30k
- BTC bulls confident, coins flowing out from exchanges
- Polkadot and Kusama traders expect Parachains to be a game-changer
The Bitcoin Correction was Inevitable, Looking Ahead
Crypto is fragile. Bitcoin traders are playing with cards close to their chest after petrifying events of the last few days.
Bitcoin prices might have recovered to over $41k as of writing on May 20, but prospects of an uptrend remain in jeopardy.
The shrink from over $50k to below $30k in hours scared the market. It explains why in the last few days, the number of coins flowing to exchanges spike. This is often interpreted as bearish and a signal of possible liquidation.
During yesterday's #Bitcoin market crash, the largest sell pressure came from young (0-3 months old) whales 🐳
My guess is that these were a combination of the wealthy entities that actually triggered this 👿 and those that got scared out of or liquidated from their positions 🪦 pic.twitter.com/37SSEPrqih
— Dilution-proof (@dilutionproof) May 20, 2021
Still, there are attempts of normalcy which bulls say is the precursor for a wave higher towards $70k. On the last trading day, there are hints of coins, once more, flowing out from exchanges to non-custodial wallets.
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) May 20, 2021
At the same time, at the depth of the crash of May 19, news came in of MicroStrategy purchasing another $10 million of BTC. It is a shot in the arm, an encouragement, especially considering Tesla won’t be selling their coins.
Once again strong insti dip buying.
— Yann & Jan (@Negentropic_) May 20, 2021
Despite the admonishment of the last few days, Elon Musk said Tesla wouldn’t sell since they have “diamond hands.”
If anything, this confidence is what the market needs at this time of great uncertainty.
Kusama and Polkadot Ecosystem
Beyond the crypto market brutality, analysts expect a strong rebound in Polkadot.
At present, projects can link in and out of the interoperable platform. However, once parachains are active, traders expect DOT and KSM coins to shoot higher.
These two are central to the core and will prime a network where dApps can infinitely scale by launching from parachains. Parachains are central to Polkadot and Kusama interoperability and scaling goals. Setting the ball rolling will be several dApps ranging from Eth2 replicas to bridges and more.
However, Karura and Acala in Kusama and Polkadot networks are pretty prominent and gaining traction. Already, their crowd loan feature has attracted heavyweight crypto funds, including Coinbase Ventures.
Kusama Technical Analysis
Kusama prices are reeling from May 19 shocks.
Expected from any other sharp dump/increment, KSM/USDT prices are in range. Of note, KSM/USDT price action is within a $300 zone and inevitably inside May 19 trade range—gives bears the upper hand.
Accordingly, if Kusama prices recover and bulls force KSM/USDT above $570 with high trading volumes, KSM may expand to $900—the 1.618 Fibonacci extension level of the Q1 2021 trade range.
On the flip side, confirmation of May 19 losses and correction below $270 may trigger another dump towards $150—the 78.6 percent Fibonacci retracement level of the Q1 2021 trade range.
Chart courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies.