Bitcoin (BTC) saw a dip like no other on Wednesday, falling to $30,000 in a frantic three-hour shakeout that upended the market.

As the dust settles, however, it’s no longer about the dip, but rather the recovery — what makes current BTC price action special?

A bounce like no other

It took around one hour for BTC/USD to go from $39,000 to $30,000 on Wednesday. This is a formidable drop but nothing unheard of when it comes to historical price action.

In dollar terms rather than a percentage, however, that hour was unlike anything seen before. Even during the COVID-19 crash in March 2020, Bitcoin’s 60% correction was smaller when measured in United States dollars.

If that weren’t enough, what happened next was even more unusual. 

After bouncing at exactly $30,000, Bitcoin shot up to $37,000 almost immediately, going on to crack $40,000 shortly after. This was the biggest rebound ever seen, squarely beating March 2020 in both percentage and raw USD terms. 

As skeptical sources called a “dead cat bounce,” Bitcoin held fast, still circling at around $39,000 over 12 hours after the bounce at the time of writing.

Leveraged players learn the hard way... again

Bitcoin’s market composition changed over the past 24 hours and is now likely made up of a different class of trader.

This is due to the veracity of both the dip and the recovery. In total, daily liquidations among traders totaled over $8 billion.

This was also far from a rare occurrence, as price volatility regularly claims the wealth of large numbers of leveraged traders in particular. Due to the size of the dip in USD, however, anyone with a long bet likely got frozen out of the market with nothing.

The way back up likewise took care of those banking on a further retracement toward the old all-time highs of $20,000. Support levels, order book data showed at the time, were broadly absent below $30,000, meaning that such a scenario was a real possibility.

Extreme fear challenges Bitcoin’s darkest days

Just how nervous traders have become as a result of recent events is shown by the Crypto Fear & Greed Index.

The classic sentiment indicator dropped to just 11/100, firmly within its “extreme greed” zone and its lowest reading since April 2020. 

Fear & Greed was at 73, or “greed,” as recently as May 9, making its own drop something of a unique event in its existence. 

The implication, therefore, is that sentiment around cryptocurrency is currently unduly skewed to the downside, with a correction of oversold token prices expected.

“Bitcoin at 40k and appetite for risk is still rock bottom,” popular Twitter account Bitcoin Archive commented on the Index.

“‘Buy when others are fearful.’”