Crypto Currency News

Bitcoin price suffers the biggest drop of the year. We tell you the reasons for the collapse

What appears to be the main reason is the product of confusion over alleged news from the Far East

Bitcoin crashed again this morning, adding the fifth consecutive daily drop and hitting lows of $ 31,000. This pullback in the price of bitcoin resulted in more than $ 3 billion in liquidations. Despite this, at the close of this note BTC had managed to recover and is trading at USD 39,600

After peaking at $ 64,000 in April, a pair of tweets from Tesla CEO Elon Musk about his concerns about the environmental impact of bitcoin mining started the price drop and the consequent sell-off of positions. .

However, the collapse of the day is due, according to experts, two main reasons.

At first one of the reasons would seem to be the US dollar with its sudden recovery. The US Dollar Currency Index (DXY), which measures the US dollar against a basket of trading partner currencies, has recovered from long-term support to reverse its downtrend. DXY is traditionally inversely correlated with Bitcoin, and along with weak stocks, it is showing the right conditions to stumble bitcoin bulls.

On the other hand, what appears to be the main reason is the product of a confusion that comes from the Far East, after a curious Reuters report on China , a country that supposedly would be about to prohibit different aspects of crypto currency trading . However, what the report indicates is nothing more than mentioning the existing restrictions.

Specifically, China does not plan to ban anything new when it comes to crypto currency trading.

After this news, the FUD – an acronym in English for fear, uncertainty and doubt, or fear, uncertainty and doubt – invaded the crypto ecosystem, and many BTC holders liquidated their assets and took the price to lows that had not been seen since March, below its 200-day Simple Moving Price Average (SMA), hovering around $ 39,825, a key support level. The average came into play for the first time since April 29, 2020. At that time, the long-term technical line was around $ 7,977.

While bitcoin has lost 40% in the last 24 hours, ether (ETH), Internet Computer (ICP), binance coin (BNB), cardano (ADA), XRP has suffered more significant losses.

Despite these drops and sales, the total settlements seen in the last 24 hours are still below the record of $ 10 billion seen on April 17, when bitcoin fell sharply from above $ 60,000. Since then, the market has mostly seen daily settlements of less than $ 4 billion.

Tags

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close