Here Are The Factors That Could Be Behind The Latest Bitcoin Wipeout
18 August 2023 - 10:15PM
NEWSBTC
Bitcoin, the largest cryptocurrency in the world, has plummeted
substantially in the past 24 hours, leading to a ripple effect
among other cryptocurrencies. On August 18, the price of BTC
suddenly dumped 8% in a matter of minutes, as tension from
investors increased selling pressure. Bitcoin has endured many
crashes of this magnitude in the past, and market corrections of
this magnitude don’t come out of nowhere. So the recent plunge in
BTC’s value could be due to several factors in the crypto industry
and the global economy. Here are some theories about the factors
that may have exacerbated the recent crash. SpaceX Reportedly Sells
Off Its Bitcoin Holdings SpaceX, Elon Musk’s aerospace company, had
reportedly sold off nearly all of its Bitcoin holdings. SpaceX, in
addition to Tesla, was one of a few companies that bought Bitcoin
during the bull run in 2021. According to reports, SpaceX held $373
million worth of Bitcoin on its balance sheet in 2021 and 2022 but
has now sold the cryptocurrency. Although it’s unclear when and how
SpaceX sold its Bitcoin holdings, the news seems to have triggered
selling pressure from investors. it’s funny how them selling
last year or whatever causes a crash now — Shibetoshi Nakamoto
(@BillyM2k) August 17, 2023 Fears Of Interest Rate Hikes By The Fed
The US is one of the biggest markets for Bitcoin and recent
revelations from the minutes of the Federal Reserve’s July meeting
hint at the possibility of another increase in interest rates. The
Fed controls interest rates in the US, and when they hike rates, it
can have a significant impact on risky assets like BTC.
Higher interest rates lead to increased borrowing costs and higher
returns on safe investments like bonds, which may discourage
trading in risky leveraged positions within the crypto space. BTC
price suffers massive crash | Source: BTCUSD on TradingView.com
Futures Liquidations And Crypto Whales Selling Big Data from
CoinGlass shows that the futures market has seen a flurry of
liquidations in the past 24 hours. The market witnessed the largest
futures liquidation this year, as BTC witnessed liquidations of
$498.88 million. Related Reading: Dormant Bitcoin Wallet With
1,005 BTC Awakens, Sell Pressure Incoming? The data suggests most
of the liquidated positions were longs, meaning traders were
betting on Bitcoin’s price to rise. In the past 24 hours, the total
liquidations come in at $1.04 billion, with $308.89 million and
$27.56 million also coming from ETH and XRP liquidations. The
Coinbase premium is up by +3%, implying some whales are dumping BTC
on Binance. And when crypto whales sell large amounts of BTC, it
can flood the market and further drive the price down.
Bankrupt Chinese Property Giant China Evergrande, China’s
second-largest property developer, recently filed for US
bankruptcy. This seems to have had some sort of domino effect on
the price of Bitcoin, as the bankruptcy news came at the cusp of
the recent decline. Do you think this is in fear of
evergrande and a domino effect or what could we be missing? —
besadam.lens (@besada_m) August 17, 2023 Does This Imply A New Wave
Of Extended Bearish Sentiment For Bitcoin? When Bitcoin crashes, it
often brings the rest of the crypto market down with it. As such,
the recent Bitcoin wipeout has led to a decrease in the price of
other cryptocurrencies as well. Data from Coinmarketcap shows that
Bitcoin is currently down by 7.06% in the past 24 hours. Major
altcoin ETH, BNB, and XRP are also down by 5.77%, 5.19%, and
13.20%, respectively. Related Reading: Crypto Payments Gain
Ground In Canada As Confidence Grows Bitcoin has had a volatile few
months and has been struggling to cross over $30,000 this year.
Notwithstanding, its price could quickly rebound again,
particularly if the SEC grants approval to the most recent
applications for Spot Bitcoin ETFs. Featured image from iStock,
chart from TradingView.com
Ripple (COIN:XRPUSD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ripple (COIN:XRPUSD)
Historical Stock Chart
From Jul 2023 to Jul 2024