The crypto market has suffered volatility over the last week with the coin prices rising significantly and nosediving shortly after. As we approach the end of August, investors are curious about how the month will end, in green or red. According to the Bitcoin chart, the flagship cryptocurrency has declined by a staggering 11.69% in the last 30 days, raising concerns among investors.
Notably, September has been known to be a month that doesn’t favor Bitcoin. In fact, statistics show that there is a 72% chance for Bitcoin to end the month in a decline, judging from the past 11 years. Meanwhile, with the present market drop, investors are raising questions like “Why did Bitcoin crash today?” or “Why is the price of Bitcoin going down?” We will give some reasons further in this post.
Why Did Bitcoin Drop Today?
Several factors have contributed to the Bitcoin price decline today, August 28. Some of them are ;
Increasing whale sell-off
Large investors, commonly known as whales, have been sighted doing away with large portions of their Bitcoin holdings. Particularly, a significant transfer was sighted by Arkham Intelligence, a prominent crypto transaction tracker. This whale moved a massive 2,300 BTC, valued at $142.24 million, to the Kraken crypto exchange about 8 hours from the time of publication.
Large transfers of cryptocurrencies to centralized exchanges are often viewed as for sale, which can spark bearish sentiment across the market, triggering other holders to do away with their assets. According to data from the aforementioned tracker, this whale still holds 18,141 BTC, worth approximately $1.08 billion. If the entity decides to sell what’s left, it might increase the selling pressure on the coin, contributing to a further downtrend.
Source: Arkham Intelligence A Wave of Long Liquidations
Bankrupt cryptocurrency lender, Celsius recently paid over $2.5 billion to about 251,000 of its creditors according to a recent report from Decrypt. Following this plan, the crypto market suffered heavy liquidations of $314.19 million. The report shows that the collapsed firm has succeded in repaying about 93% of its creditors who were affected by the shutdown.
More than 85,000 traders were caught in the liquidation web. Binance ETHBTC saw the largest single liquidation order of $12.67 million, then short sellers liquidated $31.70 million.
Also, according to a report from CNBC, a wave of Bitcoin liquidations of about $85.93 million was triggered on the Bybit exchange. Ethereum, the second-largest cryptocurrency by market cap, saw $93.52 million in long liquidation over the past day. Steven Lubka, the head of private clients and family offices at Swan Bitcoin, commented on the situation saying;
“Crypto markets moved down sharply, triggering a leverage-driven liquidation,”…“The move appears to have been kicked off by a material drop by Ethereum, which has been struggling all year versus bitcoin.”
Significant Decline in Bitcoin Open Interest
Another reason why Bitcoin crashed today is the notable decline in the BTC open interest (OI). According to reports, the Bitcoin Future’s Open Interest plummeted by over 7% to $31 billion over the last day. Consequently, a total of $312.94 million in liquidations rocked the broader crypto market.
However, historical data reveals that heightened global liquidity often sets the ground for a bullish cycle for Bitcoin. At the time of writing, Bitcoin, the largest cryptocurrency by trade volume is changing hands at $59,322, representing a 5.96% decline in the last 24 hours.
Source: CoinMarketCap
The post BTC at $59K, Here are the Reasons Why Bitcoin Crashed Today appeared first on Coinfomania.
