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 fellto justaround $6,000 USD in this current month when its was expected that the crypto market finally making a stable recovery.
The price of bitcoinreached a hike of around $6,450 USD on Sunday after a surging of 4.1 % in just amatter 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 andunexpectedreversal has notsolelyneutralisedthe long term bullmarket. Bitcoin’s $1,000 USD price correction,thatoccurred over the span of24 Hrs in lastweek,could be asturdysignal thatpessimisticforces still have control over the market.This however implies thatwecould begetting intoa market by lower lows and lower highs,thatmakes day-tradingextraordinarilytoughfor those notfamiliar totight stops.
That said, miningpriceshave enabled bitcointo keep upa firmprice around $6,000 USD which is oftenthe pointatthatsome miners struggleto keep up withtheir mining operations still profitable.
However, bitcoin’sfulminantreversal was all tied to rumours including thatGoldmanSachs 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 weretransferredto multiple different wallets,presumablyfor 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 wereadditionallyreportedly transferred to Bitmex exchange.
According to further investigations, the fundsprobablybelong to Dread Pirate Roberts, a formerSilk Road admin and Mt Gox user that have been resting for the past few years.
Walletslinked toMt Gox have undergone a slow and gradual liquidation by Nobuaki Kobayashi, the so-called Tokyo Whale tasked with offloading all remaining assets of thecurrentlydefunct exchange. Kobayashi has alreadysoldmillions of dollars of bitcoinson behalf of Mt Gox creditors but howeverstill has a stock in billions left over.