The reason for the current price drop is closely related to the U.S. economy and macroeconomic factors, impacting not only Bitcoin but also the global stock markets.
If the current price drop is due to an exit trend or new issues in the U.S. market, the Coinbase Premium Gap (CPG) should show a significant reaction.
However, the volatility during this drop has not been substantial.
The most comparable period is the Buddha Beam in May 2021.
At that time, the CPG showed a price difference of $1,600.
Additionally, during the FTX incident, there was a price difference of about $400.
If a large-scale sell-off by U.S. market players occurs, we would see this level of price difference.
Two scenarios can be anticipated:
1. Significant price volatility is likely to occur during U.S. market hours.
2. If U.S. whales want the current price drop, the real decline has not yet begun. If not, there is a possibility of a swift rebound.
Written by Mignolet