Reasons Why Price of Bitcoin Dropped, Again
Faltering the cryptocurrency market, again, Bitcoin dropped in its price from $12,050 to $9,875 across foremost exchanges on September 5, for the second consecutive day, within the short span of five days. Previously, the same has happened in March of the current year when Bitcoin went as low as $3,596 on BitMEX. However, despite the ongoing turbulence, Bitcoin is still in its bearish state as it has been selling for more than $10,000 since 2017. On the other side, Ether (ETH) of Ethereum declined by nearly 10%.
From what is being said, miners selling excessively, whales looking out for profits, and a strong dollar are most likely to be the reason behind this sudden drop of the currency.
Potential Selling by Miners:
CryptoQuant, which provides on-chain data/chart for investors looking for investment, provided data for the entire week, suggesting that mining pools taking profits. Miners trying to sell their Bitcoin holdings in large proportions added to the selling pressure, which can be one reason why BTC dropped.
The CEO of the CryptoQuant said that miners have a plethora of BTC in their cryptocurrency wallets already; so when they sell, they make momentous transactions. This too much selling off of the Bitcoins by the miners since August must have caused selling pressure on the Bitcoin.
Futures contracts worth $400 million were liquidated when the price of Bitcoin dropped down to $9,975 on Binance and BitMEX. Whales, individuals, and organizations holding large amounts of cryptocurrency have one option, liquidity, to profit from when the times do not appear to be in their favor. Since March, the price of Bitcoin has been going ups and downs. Whales, in such a situation, try to profit by selling off their large investments at the current price. This is what is being thought to be another reason Bitcoin dropped.
While the euro sinking the U.S. Dollar after four months finally started recovering. Apparently, there is a reverse relationship between the U.S. dollar and the Bitcoin. With most of the Bitcoin traders being centered in the U.S and the fact that Bitcoin is mostly measured at the USD, this appreciation of the U.S dollar contributed to the weakening of BTC.
Apart from that, ETH also dropped to $360. This decline in the value of the ETH is said to have somehow condensed Bitcoin’s bullish trend.
Where is Bitcoin Headed To?
As per traders’ extrapolations, in the near future, Bitcoin might ricochet to $11,200. If this level is achieved, it will ensure the continuation of the bullish trend for the Bitcoin. However, for some traders, there seems to be a slight drop in its value before BTC finally recovers, firmly.