Bitcoin plunged 50% one day three years ago, will history repeat itself?

Exactly 3 years ago, on March 12, 2020, the world was experiencing insecurity and panic due to the rapid spread of the COVID-19 pandemic. The pandemic has caused widespread disruption to many industries and markets, including financial markets. During this period, Bitcoin fell by 50% in just one day.

As a result, popular exchange BitMEX saw massive liquidations. In just a few minutes, as much as $750 million in bitcoin “flew” out. This caused many investors to panic and question the stability of Bitcoin as an investment.


Source: Reddit

BitMEX – Popular exchange that suffered liquidations had to shut down for “maintenance” after crash. This has raised suspicion and concern among investors, who wonder whether there is a genuine technical problem with the exchange or whether it is a deliberate attempt to manipulate the market.

In addition to BitMEX, another popular exchange, Deribit, also encountered technical problems. The sudden drop in the price of Bitcoin has caused widespread panic among investors, and it is unclear whether the price will rebound or continue to fall.

Despite the panic and uncertainty, Bitcoin has fully recovered in just two months. Prices then went on to hit new all-time highs, and investors who bought during the crash could reap handsome profits when prices rebounded.

Will Bitcoin History Repeat Itself?

data Data from CryptoQuant shows that Bitcoin’s current market value to fair value (MVRV) ratio is similar to that during the 2018-2020 price cycle. During this period, after MVRV tested level 1, BTC entered a bullish phase and triggered a market profit. Therefore, if the price successfully tests level 1 of the MVRV ratio and returns above the indicator’s 100-day moving average, it could indicate that Bitcoin is back in the game.


Source: CryptoQuant

The March 12, 2020 crash reminded us that the king of cryptocurrencies is not immune to market volatility and external events. However, it has also shown resilience after sharp price drops. Any investment involves risk, but those who have a long-term investment strategy and can withstand short-term price fluctuations have the potential to reap handsome returns.

get conclusion

In short, the Bitcoin price crash on March 12, 2020 was a pivotal event that led to panic and widespread liquidations on popular exchanges such as BitMEX. However, the BTC price fully recovered within 2 months, and investors who bought during the crash could make handsome profits afterwards.

Since the MVRV ratio is similar to the 2018-2020 price cycle, it can be optimistic that if BTC successfully tests level 1 of the MVRV ratio and returns above the indicator’s 100-day EMA, it will enter another bull run. . As always, investors should approach Bitcoin with caution and do their due diligence before investing.

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