Bitcoin’s getting kicked around after a week from hell. The heavyweights, those big institutional players, are pulling back. The result? Bitcoin is down, way down, dropping below $59,000.
If you’re wondering why, it’s all about the money—USDT to be precise. Data shows that Tether isn’t pushing out that sweet liquidity like before. According to Lookonchain:
“Institutions seem to have temporarily stopped buying, and the price of BTC dropped 4.5% today! We noticed that institutions stopped receiving USDT from Tether Treasury and transferring it to exchanges 2 days ago.”
It was $1.3 billion worth of USDT that hit the exchanges after the August 5 crash, and now, nothing. When the money stops moving, so does Bitcoin apparently.
Selling pressure: The drop that won’t quit
Bitcoin got hammered over the weekend leading up to August 12. Selling pressure hit like a sledgehammer, and suddenly, the price was free-falling, hitting as low as $57,000 during the day.
The entire market was shaking. Sentiment turned sour real fast. The Fear & Greed Index dropped to 50—smack in the middle of Neutral. No more euphoria, just nerves.
The global crypto market cap took a hit, losing 4.07% to settle at $2.05 trillion. Negative ETF flows didn’t help either. On August 9, Bitcoin ETF flows were in the red, to the tune of $89.73 million.
That’s big money pulling out, and it’s one more nail in Bitcoin’s coffin for the day. When the big boys start dumping, it’s not a good sign for the rest of us.
Altcoins and volatility: A bad mix
It wasn’t just Bitcoin that was bleeding. The altcoins were in the same boat, and it was sinking fast. Ethereum (ETH), Solana (SOL), Litecoin (LTC)—they all took a beating on August 12.
ETH and SOL dropped over 3%, and LTC wasn’t far behind, down 1.74%. Then there was the volatility. Prices were bouncing around like a rubber ball, trading between $57,000 and $61,562 in just 24 hours.
That kind of volatility is a killer for investor confidence. People don’t like it when they can’t predict what’s coming next. And when confidence goes, so does the price.
Macroeconomic factors were also in play. Inflation fears, interest rate hikes, geopolitical tensions—you name it, it was all weighing down on the market.
Bitcoin, often seen as a risky asset, wasn’t looking like the safe haven some thought it would be. Instead, it was just another thing to dump when things got rough.
As if things weren’t bad enough, there’s a lawsuit brewing that’s got everyone even more on edge. Defunct exchange Celsius decided to go after Tether in court.
They’re claiming that Tether wrongfully liquidated about $2.4 billion worth of Bitcoin collateral back in June 2022.
Celsius says they didn’t give the green light for this liquidation, which happened during a time when it was in serious financial trouble, eventually leading to bankruptcy.
Tether, meanwhile, is saying it was all above board. They claim that the liquidation was done with Celsius’s consent, part of a pre-existing agreement.
The reaction was immediate. As soon as the lawsuit news hit, the market freaked out. Bitcoin’s price took another dive, and the uncertainty surrounding this legal battle just made things worse.
Nobody likes the idea of potential liabilities hanging over their market, especially when it involves billions of dollars.
