Why has the cryptocurrency market fallen?
There are several reasons why the cryptocurrency market has experienced recent declines. Possible causes include:
1. Liquidation of derivative contracts by traders seeking to anticipate monthly expirations. The selling pressure affected the prices of Bitcoin and other cryptocurrencies.
2. Bitcoin short-writing by SpaceX, the space rocket launch company founded by Elon Musk. According to sources, SpaceX wrote down the value of its Bitcoin holdings in the quarter and sold them later.
3. Many Bitcoin options contracts expiring in August expired without generating profits. This triggered the liquidation of Bitcoin futures, creating a cycle in which cryptocurrency prices fall, options expire without profits, and futures are liquidated, intensifying the downward pressure.
4. The lack of relevant news in the summer has also contributed to the price decline. After the announcement in June that BlackRock filed for a Bitcoin ETF, which would reflect the actual price of Bitcoin rather than relying only on futures contracts, it looked like cryptocurrencies would have a prosperous summer. However, the lack of significant news has weighed on prices.
5. Risk sentiment in financial markets at large has weighed on cryptocurrencies. Concerns about slower economic growth and persistent inflation have dampened expectations for a rate cut by the US Federal Reserve, which has affected risk appetite in markets.
In short, the combination of technical factors, specific news, and the global economic backdrop has contributed to the recent decline in the cryptocurrency market.
