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    Blocktoq»Crypto News»Reasons for Bitcoin (BTC) falling sharply from $10,000 to $8,100
    Crypto News

    Reasons for Bitcoin (BTC) falling sharply from $10,000 to $8,100

    KonradBy Konrad11 May 2020Updated:12 March 2021No Comments2 Mins Read
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    Причины резкого падения биткоина (BTC) с $10
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    The factors that caused the massive price drop for 1 BTC block are not as obvious as we might think. 

    In short:

    • Bitcoin dip
    • Strong level of resistance
    • Whale reaction
    • Bitcoin halving coming up
    • To summarise

    Bitcoin dip

    The price of the world’s most popular cryptocurrency fell from $10,000 to $8,100 within 24 hours. Such a sharp decline was more than $290 million liquidations in a long position on futures contracts.

    Strong level of resistance

    For over 2 years, the area of strong resistance encountered by Bitcoin has been $10,200-10,500. This historic area is extremely hard to break through, and out of six attempts in the last 2 years, only one has succeeded, and BTC’s price in 2019 rise from $10,500 to $14,000.

    Bitcoin BTC USD chart may dip

    source: TradingView

    Whale reaction

    Bitcoin, on May 8th, rejected a price of $10,100, so the key level of resistance was not reached. The players with the most capital (whales) knowing that an adjustment can significantly reduce the price of BTC, started to liquidate their contracts. On platforms such as BitMEX and Binance Futures, investors have liquidated a total of nearly $300 million in long positions. 

    Whales on futures contract Bitcoin

    Currently, the vast majority of the market maintains short positions in futures contracts, expecting further declines in BTC.

    Bitcoin halving coming up

    Before the split of the prize from 12.5 to 6.25 BTC for the extraction of the block, which will take place on 12 May, the volume of the crypto transactions increased significantly. Many stock exchanges are reporting record volume in sales of BTC or futures contracts.

    Bitcoin halving 12 may

    When many new investors entered the market, it opened a large selloff. After halving in 2016, BTC’s price dropped by over 30% as traders responded to the drop in sales.

    To summarise

    Factors such as Bitcoin’s extended rally to $10,000, whale actions moving down the market, the large sale of BTC and the high expectations of halving event to take place on 12 May are causing BTC’s price to fall in the short term. 

    According to market analysts, such fluctuations in Bitcoin’s price are temporary, but in the long run, BTC price, including other cryptocurrencies, should go significantly up.

     

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