Bitcoin currently approaching support levels at $8,600

It's been bloody to hold bitcoin these past few days.

After being up over 40% to start the year, bitcoin has now given back roughly half of those gains.

As I type bitcoin is sitting dangerous close to $8,600.

However, there is a decent amount of support around the $8,500-$8,600.

Given the context of the halving being only 2.5 months away and bitcoin holding above its 200 day moving average for several weeks, this dip likely should be bought.

What caused the drop?

What initially may have started as the baby being thrown out with the bath water, has now turned into something more.

Bitcoin initially started selling off the past few days right along with other risky assets mostly due to fears about the coronavirus spreading.

However, now stocks are bouncing back and bitcoin is falling further....

What gives?

There was a large liquidation of longs on the Bitmex exchange early this morning that really sent prices into a tailspin....

(Source: https://coingape.com/over-100-million-xbt-contracts-liquidated-as-btc-crashes-below-9000-usd/)

Close to $200 million in long contracts were liquidated on the exchange...

This is what is known as a long squeeze.

Where long positions are forced out as price drops.

We have seen this play out many times in reverse as shorts get squeezed out as price moves to the upside.

Given the velocity of the current move, this might be the exact bottom, but given where I think we are going in the coming months, it's probably a decent time to start dipping your toes back into bitcoin.

Stay informed my friends.

-Doc