This price drop has been driven by multiple factors, both internal to the cryptocurrency space and the global financial landscape.
A decisive factor has been the behavior of Bitcoin miners, who have intensified the sale of their coins. Several mining companies have faced financial problems, even going so far as to declare bankruptcy. This increasing supply of BTC has put considerable pressure on its price.
Additionally, Bitcoin holdings on exchanges have remained low since late August. This (while often considered a bullish sign) indicates a decrease in market liquidity, which can cause sharp price fluctuations if there are changes in demand.
The BTC situation is not unrelated to the problems of the global economic scenario. In the stock markets, the Japanese Nikkei 225 index suffered a drop of nearly 7% in the last week.
At the same time, oil prices hit their lowest level for the year 2024, losing the gains made during the year and returning to levels seen in December 2023.
In the United States, tech giants such as Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla saw a combined decline in market value of around $550 billion. Nvidia was particularly hard hit, losing more than $360 billion in market value in a single day, its biggest drop on record.
These declines were triggered by a variety of causes. The US Department of Justice sent subpoenas to Nvidia and other big tech firms, causing uncertainty in the sector. Additionally, Turkeyâs application to join the BRICS+ bloc, with potential repercussions on global energy routes, has introduced an additional level of complexity to the economic landscape.
Such a volatile and unstable environment has forced many investors to reconsider their strategies in an environment that is becoming increasingly uncertain and challenging. When the situation becomes tense, investors tend to withdraw from markets considered "risky" and go to environments that are usually perceived as safer (among them, Treasury bonds and gold).
Market sentiment has fallen into the âextreme fearâ zone, a state not seen for a month. While this sentiment could accentuate short-term declines, it could also represent an opportunity for investors looking to enter the market, according to some analysts.
Historically, September has been a bearish month for markets, but some are hoping that a potential US rate cut later in the month could revive demand for risk assets like Bitcoin.
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