4 Reasons Bitcoin Price Suddenly Slid Below $9K, Liquidating $55M
June 25, 2020 @ 16:22 +03:00
The price of Bitcoin dropped below $9,000 as several factors put pressure on BTC/USD, including correlation with global stock markets.
The price of Bitcoin (BTC) dropped below $9,000 from $9,660 within seven hours. The 7% plunge comes as $55 million worth of long futures contracts were liquidated on BitMEX.
Four factors are likely behind the sudden decline in the price of the top cryptocurrency by market capitalization. Namely: stocks sliding, selling pressure from miners, an extended period of low volatility, and repeated rejection of $10,000.
Stocks’ futures opened slightly higher Wednesday evening after a sharp sell-off during the regular market session, with the Dow dropping 2.72% — its worst day in two weeks.
As regularly reported, Bitcoin and cryptocurrencies dropping with global markets has been a common theme in recent months. The realized one-year correlation between Bitcoin and the S&P500, for instance, has spiked during this time to nearly 40%.
As pointed out by analyst Filbfilb last Friday, from a technical point of view, the market remains overall bullish despite consolidating below resistance at $10,000.
Various data points from Glassnode, CryptoQuant and ByteTree indicate miners are selling Bitcoin en masse. According to researchers from Glassnode, the largest inflow of Bitcoin to exchanges was observed on June 24.
Glassnode said: “Yesterday we observed the largest flow of Bitcoin from miners to exchanges in over a year. This was primarily due to large miner transfers to Bitfinex, totalling 2,650 BTC.”
When miners start to sell their Bitcoin reserves, specifically after a key difficulty adjustment, it can leave the Bitcoin exchange market vulnerable to a short-term pullback.
If miners sell tens of millions of dollars worth of Bitcoin when volatility has been low for weeks, it can trigger a massive price movement in a short period of time.
4 Reasons Bitcoin Price Suddenly Slid Below $9K, Liquidating $55M, Cointelegraph, Jun 24