There was a week-long calm in the Bitcoin market which ended with a $800 decline in the price of BTC on Thursday this week. Below, we are sharing the reason behind the Bitcoin drop lately and how the BTC news showed an over 6% drop earlier this week.
According to the Bitcoin Price Index, the prices briefly hit lows near $9,100 which was a level last seen on May 27 this year. There are three likely factors as to why this happened.
The Reason #1 Was The Stock Market Sell-Off
If you followed the cryptocurrency news and stock news in parallel, you know that global equities cratered this week and the traditional safe havens like the US government bonds and the Japanese yen gained value as comments by the US Federal Reserve gave a reality check for many investors who hoped for a V-shaped recovery.
While indices like the Dow Jones Industrial Average (DJIA) fell by 1,800 points on Thursday, the Bitcoin price initially showed resilience by holding above $9,700 but later dropped because of the major sell-off.
The Reason #2 Were Fears Of A New BTC Dump
If you are following our latest cryptocurrencies news daily, you probably know that big on-chain transactions like the ones related to controversial wallets and addresses can cause a lot of panic in the crypto markets.
⚠ 18.732718 #BTC (184,868 USD) of stolen funds transferred from Bitfinex Hack 2016 to unknown wallet
— Whale Alert (@whale_alert) June 10, 2020
The reason behind the Thursday Bitcoin drop had a link to this. Hackers moved over 400 BTC ($4.1 million worth of Bitcoin) stolen from the cryptocurrency exchange Bitfinex to unknown wallets – and it is believed that this was another thing causing the decline in the price of the dominant asset.
Last Thing Were The Bearish Charts
Traders had a strong reason to sell Bitcoins this week. The reason behind the BTC price drop may also be this, as the cryptocurrency failed multiple times in establishing a lasting foothold above $10,000 since the May 11 mining reward block halving. The Relative Strength Index (RSI) was also negative and dropped to bearish territory below 50.
“This week the level is around $9,000-$9,100, hence [we’re] likely to see good buying here, then $8,700 & $8,200, otherwise, the next downside zone is $6,500-$7,000,” said Chris Thomas who is the head of digital assets as Swissquote Bank.
All in all, the Bitcoin price is now flirting with the $9,500 mark and may establish a new high as the week closes.
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