Bitcoin’s sharp drop as seen over the past few days have finally triggered a common question to worry ‘What is the reason behind this crypto market downfall?’. The major crypto currency fell to just around $6,000 USD in this current month when its was expected that the crypto market finally making a stable recovery.
The price of bitcoin reached a hike of around $6,450 USD on Sunday after a surging of 4.1 % in just a matter of seconds. With the gain, bitcoin has bounced off oversold levels with the relative strength index (RSI) returning with quite stability.
At the current time of reporting, the price of bitcoin is around $6,366.6 USD with a market capitalization of $109.8 Bln. The total share of bitcoin in the overall crypto market is expected to be more than 55%. This BTC dominance rate however reached its peak on 8th Sep. this year, as the other altcoin’s approached to this years lowest prices.
Bitcoin’s sharp and unexpected reversal has not solely neutralised the long term bull market. Bitcoin’s $1,000 USD price correction, that occurred over the span of 24 Hrs in last week, could be a sturdy signal that pessimistic forces still have control over the market. This however implies that we could be getting into a market by lower lows and lower highs, that makes day-trading extraordinarily tough for those not familiar to tight stops.
That said, mining prices have enabled bitcoin to keep up a firm price around $6,000 USD which is often the point at that some miners struggle to keep up with their mining operations still profitable.
However, bitcoin’s fulminant reversal was all tied to rumours including that Goldman Sachs was abandoning its plans to launch a crypto trading desk, the wheels were set in motion roughly one week before the collapse happened. That was the time when roughly around $800 Mln worth of BTC and BCH were transferred to multiple different wallets, presumably for liquidation. Roughly around more than 13% funds were moved to the two leading crypto exchanges namely Bitfinex and Binance laterly. Rather than this, hundreds of bitcoins were additionally reportedly transferred to Bitmex exchange.
According to further investigations, the funds probably belong to Dread Pirate Roberts, a former Silk Road admin and Mt Gox user that have been resting for the past few years.
Wallets linked to Mt Gox have undergone a slow and gradual liquidation by Nobuaki Kobayashi, the so-called Tokyo Whale tasked with offloading all remaining assets of the currently defunct exchange. Kobayashi has already sold millions of dollars of bitcoins on behalf of Mt Gox creditors but however still has a stock in billions left over.