Bitcoin’s (BTC) severe 26% drop from its $58,300 all-time high on Feb. 20 injected a bit of bearishness into the market but from a technical perspective, this was purely psychological as the digital asset held the $43,000 support with ease. This downside move caused indicators like the Crypto Fear & Greed Index to hit 38, its lowest level in five months.
Even though a $15,400 downside move might seem unusual, 25% and even larger corrections have happened on six separate occasions during the 2017 bull run. Moreover, when BTC first made an all-time high at $42,000 on Jan. 8, a 31.5% negative swing to $28,750 happened in the following two weeks.
As Bitcoin tried to establish a bottom, derivatives contracts eliminated any bullish signal and momentarily displayed worrisome data. For example, the open interest on futures dropped 22% after peaking at $19.1 billion on Feb. 21.
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