From 5% to ~15%, Bitcoin Price Value Scraped off in 24 Hours
The crypto space is still reeling in the aftermath effect of a sharp drop of about 13% in the price of the top cryptocurrency. Bitcoin price dropped from ~$7400 to ~$6400 between Wednesday Sept. 5 and Thursday. The drop, which somewhat makes Bitcoin’s volatility scarier, started with a concern raised about the rumour of a whale moving and planning to dump about $1 billion worth of Bitcoin on the market.
Though when calculated in Bitcoin terms at the time of the rumour, the said amount is worth ~140,000 Bitcoin. Its sale could not be said to be worth dropping the price so low and within such a timeframe, considering that over a million Bitcoin get exchanged over a 24-hour period. However, going by the several transactions recorded according to a Bitmex liquidation bot ranging from as low as 500 to 10,000,000 Bitcoin being liquidated at a time in a 24-hour period, the sequence of sales is enough to trigger panic selling and raise the bar higher than ~$400 that was initially scraped off the price of Bitcoin in less than two hours on Wednesday.
Liquidated long on XBTUSD: Sell 9,999,191 @ 6378 💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯
— REKT (@BitmexRekt) September 6, 2018
Goldman Sachs effect
Another contributing factor could be the news that financial services giant, Goldman Sachs has put its plans to open a desk for trading cryptocurrencies, at least for the near term, according to a Business Insider report on September 5, 2018. The market has been looking forward to several crypto-related initiatives to debut later in the year including Goldman Sachs’ with the hope they will improve the space. The company’s decision to halt the plan due to lack of regulatory oversight but chose to focus on providing an institutional service may have dampened some investors’ appetite for the new asset class.
Dumps like this decentralize Bitcoin giving several others the opportunity to redistribute the cryptocurrency which is good for the market in the long term. With the Bakkt platform scheduled for launch in November and another (supposed) pro-ETF SEC commissioner just nominated – making two of them – thus likely increasing the chances of the Van Eck SolidX ETF application being approved, a lot is likely to happen in coming days.
Bitcoin has been known to make reversals at will despite the uneasiness sharp drops like this create for a lot of traders. Holding is never a problem for those who are not into trading until it recovers. Figures show that the market does not want Bitcoin’s price to go below $6,000. It can only gain from there.