Bitcoin (BTC) saw a major surge in buying activity on Monday after the conclusion of President Trump’s press conference where he detailed the use of U.S. armed forces to halt widespread protests.
As a result, BTC jumped from $9,500 to $10,400 in under an hour, leading many to rejoice over the start of a new bull run. However, in true Bitcoin fashion, the gains were erased just as fast after the cryptocurrency failed to continue the rally on Tuesday after fell back to $9,500.
A good indication that this was a trading bot-driven move was that the entire surge occurred in a single hourly candle, followed by BTC trading within a tight range for a number of hours before heading back down. This is known as the Bart Simpson pattern and traders from 2018’s low liquidity bear market know that it generally isn’t a good sign.
The move indicates that liquidity is currently low in the crypto market, likely due to investors being preoccupied with nation-wide protests, soaring unemployment and COVID-19.
Notably, on the once-popular derivatives trading platform BitMEX, the price of BTC plunged as low as $8,600, further demonstrating the lack of liquidity. This comes right after the platform’s biggest short squeeze in 8 months that resulted in $90 million in liquidations.
Overall, the price action of Bitcoin and other major digital currencies looks like topping behavior as no new capital seems to be entering the market.
More: Pentagon officials express concern as Trump threatens to use military to ‘dominate’ protestors
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.