Bitcoin’s Crypto investors were left perplexed by the dip in bitcoin’s price, which dropped by about 8% in a matter of 10 minutes.
Bitcoin’s unexpected price drop on August 18 was influenced by Elon Musk’s SpaceX selling
Some explanations for Bitcoin’s unexpected price drop include Elon Musk’s SpaceX allegedly selling its Bitcoin BTC tickers down $26,456 holdings, the bankruptcy of a Chinese real estate mogul, and concerns about interest rate hikes.
Around 9:35 p.m. UTC on August 18, the price of BTC abruptly dropped by almost 8% in a matter of 10 minutes, wiping out the larger cryptocurrency market and leaving many in the community perplexed.
While there doesn’t seem to be agreement on the cause of the market’s abrupt decline, a number of cryptocurrency market analysts have shared their initial views with Cointelegraph.
SpaceX dumps Bitcoin and worries about interest rates
According to EToro market analyst Josh Gilbert, the decline was caused by a claim that SpaceX may have sold all or part of its $373 million in BTC assets. This news was based on a Wall Street Journal article dated August 17th.
This would place the unexpected price reduction 2.5 hours after the article’s online publication.
Another argument, according to Gilbert, is that the sudden change in mood is a result of anticipation on the part of the larger markets over potential interest rate increases from the U.S. Federal Reserve.
“If we also take into account some of the weaknesses we’ve seen across global markets — particularly risk assets — over the last few weeks, it was a recipe for a pullback,” Gilbert said. “Rates will likely stay higher for longer.”
Government bond yields
A market analyst from CMC Markets named Tina Teng offered a different perspective, blaming the sell-off on the recent increase in government bond yields.
According to Teng, rising bond rates often signal a decrease in market liquidity.
This might be the main cause of the decline in cryptocurrency prices, she suggested.
Teng added that while the Evergrande situation might indirectly affect the price of bitcoin, she didn’t think it was one of the main reasons for the decrease. “This has more of an effect on investor and economic sentiment toward China,” she said.
Chinese Yuan still a risk to Bitcoin
However, while Markus Thielen, Head of Research at Matrixport, asserted that the prospect of a Chinese Yuan depreciation may have played a large influence in the sell-off, Teng dismissed the Evergrande problem as a major factor in the price fluctuation of Bitcoin.
“When China devalued the Yuan for the final time in August 2015, Bitcoin values fell by -23% in the two weeks that followed the devaluation. Before a more significant rally got going, Bitcoin ended the year up +59% from its depreciation level, according to Thielen.
Whale’s selling big
TheFlowHorse, a pseudonymous options trader, told Cointelegraph that the abrupt move down may have been caused by a single large actor making a massive sell, which then put additional pressure on derivatives, despite the fact that there were numerous other news events that could be to blame.
In the four hours prior to publication, more than $427 million in long bets in Bitcoin were liquidated, according to data from the cryptocurrency monitoring portal Coinglass. There had been more than $822 million in liquidations for traders with open long positions during the previous 24 hours, a wager that the price of crypto assets would rise.
Horse said that given the news of the SEC signaling its approval of an Ethereum Futures ETF arrived moments after the dump — a huge fund may have offloaded their Bitcoin stake to “trigger a cascade to buy ETH” because many of the causes for the decrease were “pure speculation.”
https://usaeverydaynews.com/yellowknife-residents-of-canada-forced-leave/