The Big Crypto Drop: Was It a Trick?
Imagine if a billion dollars just disappeared. Poof! That's what happened in the world of cryptocurrency recently. A lot of people who were hoping the price of crypto would go up suddenly lost all their money. It happened very fast.
On the internet, everyone started to panic. They screamed, “It’s over! The good times are done!” But what if this crash wasn't an accident? What if someone made it happen on purpose to trick people? Let's look at the clues.
Clue #1: The Stock Market Was Fine
The biggest clue that something was strange was the stock market. On the very same day that Bitcoin's price dropped a lot, the regular stock market was doing great and hitting new record highs!
Usually, Bitcoin and the stock market move together, like friends walking down the street. If one goes up, the other often goes up too. But this time, they split and went in opposite directions. This tells us the problem wasn't with money all over the world. It was a planned attack just on crypto. It was made to scare people and make them sell.
This Has Happened Before
Big, scary drops like this are actually normal in crypto. They are a trick that the biggest players, sometimes called "whales," like to use.
Think of it like shaking an apple tree. The whales shake the market hard. This makes all the nervous people (sometimes called "weak hands") get scared. They sell their crypto to stop losing money. Then, the whales can scoop up all that crypto for a very cheap price.
After they've bought it all, the price usually goes way up again. This happened in 2017 and again in 2021. Big, scary drops came right before the price soared to new records.
The Game Has New Players
The crypto world is different now. It used to be mostly regular people buying and selling. Now, giant companies that manage trillions of dollars are in the game.
These big companies are pros. They know how to play the game and are very good at planning these shakeouts. It's like they are playing chess while everyone else is playing checkers. They can make the market move exactly how they want it to.
But Crypto Is Still Growing Stronger
Even while the big players play their games, something amazing is happening. More and more people are using crypto for real-world things.
One type of crypto, called a "stablecoin," is now used for more money transfers than giant companies like Visa and Mastercard! This means crypto isn't just a game to get rich. It's becoming a useful tool for everyone. This is why the big companies want to buy so much of it—they see how important it will be in the future.
How to Spot a Trap
There's a special way to check if a crash is a real panic or just a trick. It's a chart called Bitcoin Dominance.
This chart just shows how much of all the money in crypto is currently in Bitcoin. When people get truly scared, they sell all their other, riskier coins and move their money into Bitcoin because it's seen as the safest. When this happens, Bitcoin Dominance shoots way up.
But during this big drop, the chart barely moved. This is a huge clue! It tells us people weren't panicking and running away. It was just a planned attack to wipe out people who had borrowed money to bet that the price would go up.
What Does This All Mean?
So, how did the trick work? The big players got everyone excited and hopeful. People started borrowing money to buy more crypto. Once everyone was in on the bet, the whales pulled the plug and crashed the price.
This forced all the people who borrowed money to sell, which made the price drop even more. The whales were waiting at the bottom to buy everything for cheap. They didn't just buy the dip. They created it.
So, when you see a big, scary drop in the crypto market, the best thing to do is often… nothing. Don't sell because you're scared. Don't trade more because you're angry. The people who planned the drop want you to be emotional. By staying calm and sticking to your plan, you don't fall for their trap.
The End
@Shortsegments
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This post was written by Shortsegments, who has been writing about cryptocurrency, the blockchain, digital ledgers, bitcoin, ethereum, and decentralized finance for seven years. You will find his articles here on his blog Link to his blog.
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