Bitcoin sudden price drop by 9% arouses skepticism in the cryptocurrency market
According to the Bitcoin Price Index, the Bitcoin market value dropped by more than 9% which is around 800$ and is the biggest drop down in a single over the past two weeks. The three main reasons behind this downfall can be :
Stock market to witness another panic:
The sell-off in the US market created a panic among the crypto-market traders that the economy might be going downhill and would take years to recover. The U.S. Federal Reserve also suspected this impending price drop. The Bitcoin held its market value above $9,700 during the Asian and European trading hours. But soon after, it fell trap to the economic gap.
The co-founder of Stack told CoinDesk;
A switch to ‘risk-off’ in global markets could lead to further downside pressure for major cryptocurrencies
Transactions on controversial wallets cause fear:
There were some malicious incidents in the past where users had liquidated the stolen coins in the market, causing immediate price decline. These kinds of incidents can create panic in the cryptocurrency market especially when it comes to huge on-chain transactions related to controversial wallets.
According to a tweet made by Whale Alert, 400 BTC were stolen from the cryptocurrency exchange Bitfinex to unknown wallets, on Thursday.
Fears arose by investors that these so-called “Whales” might be preparing to dump a large number of coins, which has resulted in fewer investments.
Charts depict a declining market:
The cryptocurrency has never been able to establish a lasting foothold above $10,000 since the May 11 mining reward halving. A three-day chat of bearish divergence also indicated a price with a drawl.
Moreover, the relative strength index has dropped down to below 50 in the bearish section. Analysts are of the view that there is strong support around $9,100, and if this is conquered then there can be a stronger selling pressure.
Chris Thomas, who’s the head of digital assets at Swissquote Bank stated:
This week the level is around $9,000-$9,100, hence [we’re] likely to see good buying here, then $8,700 & $8,200, otherwise, the next downside zone is $6,500-$7,000.