Last night, the price of Bitcoin fell by about 9% in 10 minutes to reach the $25,200 range for the first time in more than a moh. SpaceX’s sale of bitcoins, the bankruptcy of a Chinese real estate gia, and fear of rising ierest rates are among the reasons analysts have cited for this unusual price drop.
According to Coielegraph, it seems that analysts have so far not reached a consensus on why the sudden fall in the price of Bitcoin and the eire digital currency market after it. The incide that led to the liquidation of more than 1.04 billion dollars of trading positions in the last day and night.
Selling spacex bitcoins and fear of ierest rate increase
Josh Gilbert, a market analyst at eToro, attributed this decline to the possible sale of part or all of SpaceX’s $373 million worth of Bitcoin, which the Wall Street Journal had published a report on on August 17 (August 26).
Whenever a big name in the industry sells Bitcoin, someone as influeial as Elon Musk will put pressure on the price.
The sudden drop in Bitcoin price last night occurred about 2.5 hours after the Wall Street Journal report was published.
Gilbert added that the rapid change in market seime due to the widespread expectation of ierest rate hikes in the coming mohs from the Federal Reserve could be another reason for this. He explained:
Considering some weak trends in global markets, especially in risky assets, along with the expectation that we will probably see high ierest rates for a longer period of time, we could expect a price correction.
He added:
Bitcoin traded in the $29,000 to $30,000 range over the past moh and tried to reach higher levels with the release of some good news, which only resulted in an increase in widespread selling pressure.
Rising US governme bond yields
Tina Teng, a market analyst at CMC Markets, has a differe opinion and considers the rece increase in governme bond yields to be the main cause of this fall. He explained:
An increase in the ierest of these bonds usually means a decrease in liquidity in all markets. An eve that can be the main reason for the fall of the digital currency market.
In addition, Teng noted that the bankruptcy of Chinese real estate gia Evergrande could indirectly coribute to the fall in the price of Bitcoin, but it cannot be the main cause. He explained:
The Evergrande crisis affects the seimes of the market towards the Chinese economy and investors.
The negative impact of the devaluation of the Chinese yuan on the price of Bitcoin
While Teng does not see the bankruptcy of the Chinese real estate broker as the main reason for the price volatility in Bitcoin, Markus Thielen, head of research at Matrixport, believes that the risk of a devaluation of the Chinese yuan may have played a role in the massive selloff.
The biggest curre macroeconomic risk is the depreciation of the Chinese yuan, which has reached its weakest level since 2007.
He explained:
In August 2015, when China devalued the yuan for the last time, the price of Bitcoin fell by 23% over the next two weeks. Before starting a larger uptrend, Bitcoin ended the year up 59% from the level it had fallen to due to the depreciation of the yuan.
Wide sale of whales
Despite the release of other news eves that could have been the cause of the rece market crash, a derivatives trader with the nickname TheFlowHorse believes that this could be caused by a large selloff by a whale, which led to more pressure in the derivatives market. He said:
This series of sales was not natural. A great actor with a clear goal passed bail and moved the market; Because the size of the spot market is not comparable with the derivatives market.
According to CoinGlass platform data, more than 373 million long Bitcoin transactions were liquidated in the last 24 hours. The total value of liquidated long transactions during this period, which bet on the rise in the price of digital currencies, has exceeded 836.5 million dollars.
Clarifying that many of the reasons given are pure speculation, Horace added that since news of the possible approval of an Ethereum futures ETF broke momes after the crash, it’s possible that a large fund may be rebalancing its bitcoin position with the ieion of cascading. From selling to buying ethereum.
According to market data, the price of Bitcoin has gained about 1.6% in the past few hours and is now trading in the $26,550 range. This price increase appears to be related to the release of the news that several Ethereum futures ETFs were approved by the Securities and Exchange Commission in October.
