Bitcoin’s Value Falls 9%, Over $1 Billion Lost in Cryptocurrencies. SpaceX Not to Blame, Other Reasons Likely.
Reetika, a crypto fan from Dubai, had the same thought as lots of others when she looked at her digital money after waking up: “Who sold?” The cryptocurrency world had been quiet for a few weeks, but that changed when the value of Bitcoin dropped from $28,500 to $25,000 in just one day on a platform called Binance.
This big fall affected a lot of things – Litecoin (LTC) went down by 14%, and people lost around $1 billion because of the drop in the future value of cryptocurrencies.
Just woke up.
WHO SOLD pic.twitter.com/iusl2dAC20
— Reetika (@ReetikaTrades) August 18, 2023
SpaceX Rumors Not to Blame for Bitcoin Drop; Market Dynamics at Play:
There were rumors that the big change in the cryptocurrency market happened because SpaceX sold some of its Bitcoin. But there’s no strong proof for this. A report from the Wall Street Journal says that SpaceX actually just changed the value of its Bitcoin to lower its taxes. This happens when the value of something goes down, so companies can pay less tax. But we don’t know exactly how much Bitcoin SpaceX has, and there’s no proof that they sold a lot.
Traders who know a lot about this say that the drop in the price of Bitcoin happened because of how the market works and because of sudden selling. The market was a bit slow, and there wasn’t a lot of trading happening. This made it easier for the price to change suddenly.
3/ Whales' Distribution
From the On-chain perspective, we can see an increase in whale spending activity before and during the sell-off. pic.twitter.com/AVRZs30LsP
— CryptoQuant.com (@cryptoquant_com) August 18, 2023
Trader’s Insights and Factors Affecting Recent Crypto Market Drop:
Lewis Harland, who works at Decentral Park Capital, explained how the cryptocurrency market works to CoinDesk. He talked about something called “open interest,” which is about contracts that haven’t been settled yet. When a lot of these contracts are there in a quiet market, if a big group sells a lot, the prices can quickly go down. Then other people also start selling to avoid losing money, making the prices go even lower.
Most of the selling happened on a crypto exchange called OKX, which is about 40% of the market.
Also, some people say that things happening in the bigger financial world, like the U.S. interest rates going up a lot, might be making it harder for cryptocurrencies.
Lastly, everyone’s looking forward to a court decision about a special kind of investment for Bitcoin, called an exchange-traded fund (ETF). This decision will come soon, and it could either help the market or make it worse. People are waiting and watching carefully to see what will happen next in the ever-changing world of cryptocurrencies.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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