Bitcoin’s price dropped sharply on November 9 as news of successful COVID-19 vaccine trials is announced by American pharmaceutical company Pfizer. However, the crypto’s price remains within the support and resistance range, signifying strong bullish signs.
American pharmaceutical company Pfizer announced in a press release on November 9, 2020, that the first set of results of their Phase 3 COVID-19 vaccine trial revealed that their mRNA-based vaccine candidate BNT162b2 has been successful in preventing the spread of the virus. Tested on almost 44,000 subjects, the vaccine showed an efficacy rate of 90%.
Within the same day as Pfizer’s announcement, Bitcoin and gold dropped, with the cryptocurrency plummeting 6.5% and gold falling over 5%. After a four-day streak of US$15,840, Bitcoin lost a thousand dollars and fell to US$14,805, which is still well within its US$14,000 support range.
Despite the sharp drop, there is no worry about Bitcoin ending its bullish run. In fact, analysts say that this short-term pullback is beneficial for the cryptocurrency since it showed that even with a major drop, investors are here to stay. This only shows that long-term interest in Bitcoin is higher compared to the mainstream attention it got during the first crypto craze in 2017.
Six hours after the drop, Bitcoin climbed back to the US$15,000 territory possibly due to whales buying back large numbers of Bitcoin at a lower price. Whales are big-time players who hold large stakes on an asset. With significant quantities of an asset to their name, their actions greatly influence the direction of a chart.
Ki Young Ju, the CEO of on-chain data analytics group CryptoQuant, says that it is normal behaviour for whales to sell large quantities of an asset during a bull run. As a result, this influences a price drop and increases buyer demand in the market. Afterwards, they would buy back the assets they sold at a lower price to drive the chart upwards. This can also be a way to beat Bitcoin’s tough resistance area at US$16,000.
However, not only major institutional investors are putting their money on Bitcoin. According to the blockchain data analytics group Glassnode, a large number of Bitcoins are moving from exchange platforms to personal wallets. Instead of selling their coin to reap instant rewards, there is a significant number of people who are choosing to hold onto their coins and invest in the long-term.
This optimistic belief for Bitcoin from whales and small-time investors ensure that Bitcoin’s bullish market is just warming up and is far from over. As on-chain analyst Willy Woo said, ‘Bitcoin is still in [the] stealth phase of its bull run.’ At this point, there’s no need to worry when short-term drops occur since they are only indicative of the desire of Bitcoin investors to see its price climb to greater heights.
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Bitcoin (BTC) $ 19,461.19 2.48%
Ethereum (ETH) $ 1,061.36 5.28%
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BNB (BNB) $ 213.26 2.41%
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