Bitcoin loses $ 3,000 in a few hours and takes the entire crypto market to the red
After showing the fastest growth of the year, Bitcoin finally corrected, losing almost $ 3,000 in about 3 hours, resulting in a price below $ 16,400. But what happened?
At around 2:15 UTC, the price of Bitcoin (BTC) started to plummet significantly, as its value fell below a previous support area around $ 18,474. So far we have a drop of more than 12% in 24 hours.
Chart by: TradingView
What are the reasons behind the fall of Bitcoin?
What caused the price of Bitcoin to plummet on Thanksgiving Day (a major holiday in the United States)? Some things. The first was an increase in exchange activity. Several whales – those with over 10,000 BTC – appeared to be moving considerable amounts of currency to exchanges.
Historically, such movements are an indication of who is about to leave their positions. In fact, the chart provided by Ki Young Ju, CEO of online analytics firm Crypto Quant, shows the peak in inflow as soon as the decline began.
All Exchanges Inflow Mean increased a few hours ago.
It indicates that whales, relatively speaking, deposited $ BTC to exchanges.
But long-term on-chain indicators say the buying pressure prevails. I still think we can break 20k in a few days.
– Ki Young Ju 주기영 (@ki_young_ju) November 26, 2020
“The average entry of all exchanges increased a few hours ago.
This indicates that whales, relatively speaking, deposited $ BTC on exchanges.
But the chain’s long-term indicators say that buying pressure prevails. I still think we can break 20k in a few days. ”
Others have suggested that the reopening of the exchange OKEx, which holds about $ 13 billion in Bitcoin, was partly to blame. However, it was supposed that the exchange had not yet released withdrawals during the fall *, which could signal further losses today.
In addition, the settlement movement occurs at a time when Coinbase CEO Brian Armstrong, expressed his concerns on Wednesday night about rumors of the U.S. Treasury Department’s plans to try to track down the owners of self-hosted cryptocurrency wallets.
Notably, the drop liquidated $ 950 million in positions on major exchanges, as noted by the derivatives data provider Bybt.
“BTC’s latest price drop is the first of many tests for new money on whether they have the vision and stomach to really invest in BTC and the future of digital finance, or whether they will simply repeat 2018 and be eliminated from the market,” said Jehan Chu, co-founder and managing partner of Hong Kong blockchain trading and investment company Kenetic.
In addition, the price of most other notable cryptocurrencies has also dropped, such as Ethereum (ETH) and Ripple (XRP). Chainlink (LINK) and Cardano (ADA) suffered the worst drops across the board, losing 18.9% and 16.7%.
* Correction at 8:12 am on 11/26: Apparently, the exchange anticipated the release of withdrawals, allowing customers to make withdrawals already during the early hours of today, during the fall of Bitcoin.