Here’s Why Bitcoin Price is Crashing
Bitcoin (BTC), the world’s most popular cryptocurrency, has been making headlines recently, not for its meteoric rise, but for its significant dip. Over the past 30 days, Bitcoin's price has plummeted by as much as 11.23%.
Recent Trend: Bitcoin’s Downward Spiral
Since the start of June, investors have been keeping a close watch on Bitcoin. Despite optimistic forecasts for 2024, such as the approval of spot BTC exchange-traded funds (ETFs) and expert predictions that the coin’s price might soar to $100,000 or even $300,000, the reality has been quite the opposite. For much of the last month, Bitcoin has been in a downtrend, currently standing at $61,437 – well below its usual range of $65,000 to $67,000.
Factors Contributing to the Crash
Identifying the main reasons behind this Bitcoin crash can be challenging. However, several recent events seem to have spooked traders and investors, leading to a $100 billion loss over the period.
German Government’s BTC Sale:
Mid-month, the German government started depositing large amounts of BTC it had seized earlier in January into various cryptocurrency exchanges. With a total of 50,000 Bitcoins up for sale, this move naturally caused concern among investors about potential price disturbances.Historical Precedents:
Past government sales, like the US selling 50,000 Bitcoins seized from the Silk Road dark web network, illustrate that significant offloads by law enforcement usually don't result in price dumps. But the current jitters around these sales didn't help Bitcoin’s situation.Mt. Gox’s Redistributed Assets:
Adding to the turmoil, there were news reports in May that Mt. Gox, a bankrupt cryptocurrency exchange, is readying to redistribute assets to creditors, with payouts starting in July. Given that this includes approximately $9 billion worth of Bitcoin, fears of increased selling pressure have only grown.
Low Trading Volume:
Low trading volume reported in early June likely amplified any price changes caused by these large BTC sales.Technical Analysis Results:
Recent technical analysis (TA) from several prominent cryptocurrency experts predicted a substantial downtrend, further rattling investor confidence.Profit-Taking:
Despite the high price targets set by experts and recent positive developments like Bitcoin halving and Standard Chartered’s new trading desk, traders might have lost patience. The stagnation of Bitcoin near $67,000 for several months could have led to profit-taking.
Conclusion
The Bitcoin price crash can be traced to a combination of several significant events that led to increased selling pressure and investor panic. Whether the cryptocurrency can bounce back or continue its downward trend remains to be seen.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
