Your favorite crypto news blog

4 Reasons Why Bitcoin Price Continues to Crash

Bitcoin 2019/11/25 10:09 by Emilio Janus
4 reasons why bitcoin price is tanking

Bitcoin has continued its cataclysmic November, with price dropping further overnight to levels not seen since this May. Although it is little consolation, it never hurts to examine potential reasons following a crash, so without further ado…

1. BitMEX Dumping On The Market

Yes, we’ve said it before, but that doesn’t make it less true. One entity that gains whichever way the market goes is BitMEX. Liquidated positions on the futures exchange lead to huge fees collected, which BitMEX has no qualms about dumping straight back onto the market.

According to analyst, Alex Krüger‏, BitMEX is currently raking in fees as much as 7% of the total combined miner issuance. A large percentage of this is sold right back into the market.

So those taking highly leveraged bets on bitcoin through BitMEX are not only putting themselves in a position to very likely get Rekt. They are also potentially damaging for the whole market. Sadly, a lack of volume on BitMEX isn’t necessarily any better.

2. Shaken Confidence After Drop To $7k

Whenever there is a significant drop in BTC price, such as the pre-weekend dump to $7k, many investors lose confidence. Concerned about further losses, they jump ship, and accelerate the asset’s decline.

This ‘shaking out of weak hands’ is not of great concern to longer term HODLers, or those wishing to increase their bitcoin bags. After all, some idiots need to buy high and sell low, so that they can do the opposite.

3. Bitcoin Doesn’t Always Respond To Macro Variables

The US Federal Reserve’s continued policy of quantitive easing was supposed to be bullish for bitcoin, right? Well that narrative hasn’t exactly played out so far. Unfortunately, Bitcoin doesn’t always respond to such macro variables.

Again, pointed out by Krüger‏:

It is such an illiquid/fragmented market that in the absence of mass influx of new buyers, actions of a few determine direction. Micro, not macro.

4. Bitcoin Whales Stocking Up Before Halving

In a market which is readily influenced by the actions of a few, we can’t discount the possibility that bitcoin whales are putting downwards pressure on price, in order to stock up on BTC before next year’s halving event.

The general consensus is that this will lead to a significant (and perhaps permanent) price increase, so it makes perfect sense to be holding as much as possible before then.

Of course, this doesn’t only apply to whales.

Why do you think Bitcoin’s price is crashing so hard right now? Add your thoughts below!

Images via Shutterstock

The post 4 Reasons Why Bitcoin Price Continues to Crash appeared first on Bitcoinist.com.

0 Like(s)

You should also read...

Bitcoin 29/11/19 14:22 by Christine Vasileva
Bitcoin (BTC) Futures Markets Hit $5B Daily Volume
The Bitcoin (BTC) market has evolved to include the simplest kind of derivative financial products – futures contracts. Those markets now reach $5 billion in daily volumes, taking a significant ...
Read More
Bitcoin 12/12/19 05:00 by Martin Young
Bitcoin Sees Big Stop Run With Spikes to $7,450, Liquidating Shorts
Crypto markets are depreciating for another day as Bitcoin fails to gain any traction. Volatility appears to be returning as a big spike triggered a lot of liquidation a few hours ago. The overall pic...
Read More
Bitcoin 23/03/20 12:16 by Brenda Ngari
Billionaire Bull Mike Novogratz Perfectly Explains Why He Believes 2020 Will Be Bitcoin’s Year
After hovering just below $6500 yesterday (March 22), the bears won the day as BTC price crumbled below $6,000. Bitcoin is trading at $5825.42 at press time and some traders expect further correction...
Read More
Crypto 08/04/20 21:48 by News Desk
5 Reasons Why Crypto Will Get Through COVID-19 Outbreak
Since the novel coronavirus has been officially declared a pandemic, the crypto space has been flooded with negative opinions about the future credibility of digital assets. As the disease has spared...
Read More
Bitcoin 08/05/20 01:28 by Nick Chong
Bitcoin Just Surged to $10,000: Here’s What Analysts Think Comes Next
Just hours after our last market update, Bitcoin has topped $10,000. This is the first time the cryptocurrency has done this in over seven weeks. After holding $9,400 for all of Wednesday, the cryptoc...
Read More