This is why the cryptocurrencies is dropping
First, I want to point out that this was no surprise. Anyone who knew what was going on predicted this drop two to four weeks ago. Now I’ll tell you how I knew what was going to happen and didn’t lose anything in this sharp drop.
Look at this picture. This is the weekly chart of Bitcoin (BTCUSDT).
What you see at the bottom of the screen is the Relative Strength Index (RSI). It shows the strength of the movement (up or down) and the strength of the support for the price movement.
As you can see in the graph from point 1 to point 2, the price has gone up, but look at the RSI as it goes down from point 1 to point 2. The question now is: "Why is the price going up while the RSI is going down?"
Well, it’s called a divergence. The real reason this divergence appears here is that the big (smart) money pulled out of the market at point 1 (or all or a large portion of the big smart money). Then, after point 1, the price fell for two weeks, as you can see in the graph. Now that the big whales have left, the little fish swam out and invested their money, so the price went up to point 2.
But there’s a difference between the price reaching point 1 and the price reaching point 2. The difference is, for example, 10 rich whales invested $10 billion in Bitcoin, the price went up to point 1, then they pulled out their money, and the little fish came in. So, 100,000 regular people invested $10 billion in Bitcoin, and the price went up to point 2 again. See the difference?
Ten rich, smart whales don’t panic; They know what they are doing, but 100,000 regular traders looking for a quick profit will panic at the first sign of danger. So, from point 1 to point 2, those big whales retreated from the market so slowly and carefully that they didn’t suspect anything. They continued to buy Bitcoin at an inflated price, and the whales were happy to sell at the highest price. One red candle appeared, the whales panicked and sold wildly, and the rest is history.
This divergence is the real reason for the price drop, but don’t panic. Big drops are good for the market. The funny part is that while the whales panicked and sold their valuable assets, they re-entered the market and bought cheap coins to prepare for a $100,000 Bitcoin price (remember, Bitcoin dropped from $20,000 to $3,200 to prepare for $40,000, $50,000, and $60,000).
