What Bitcoin Black Thursday Teaches About Intraday Risk
Replay Bitcoin's March 12, 2020 crash and compare the daily close with the prices reached inside the move.
2 min read
A daily close is not the worst price of the day
Bitcoin trades around the clock. Each daily candle groups 24 hours of trading into four prices: the open, high, low, and close. The candle body connects the open and close. The wicks show how far price moved before the day ended. Our guide to reading a chart explains these parts in more detail.
What can you see before pressing Play?
Bitcoin had already weakened before March 12, 2020. It fell from above $10,000 in February to about $7,900, with several large red candles along the way. On March 11, the World Health Organization described COVID-19 as a pandemic while markets were already under heavy stress.
Before pressing Play, ask: if Bitcoin closes far below $7,900, could traders have faced an even lower price before that close was recorded?
What happened inside the crash candle?
The March 12 candle opened at $7,934.58 and closed at $4,800, a fall of about 39.5%. But Bitcoin traded as low as $4,410 during the day. It also reached a high of $7,966.17. The full distance from the high to the low was therefore more than $3,500 in one daily candle.
A chart that records only closing prices would miss the move below $4,800. A trader with an open position still faced that lower price, even though Bitcoin recovered before the candle closed. The wick is not decoration. It records risk that the closing return leaves out.
Why this matters to a trader
When volatility rises, do not estimate risk from recent closing changes alone. Check the full high-to-low range and the size of the wicks. Then choose a position small enough to handle moves that happen before the daily close. Our position-sizing lesson shows how trade size changes the amount at risk.