Bitcoin Plummets Below $26,000 Leading Crypto Market into Turmoil
Late Thursday witnessed a seismic shift in the cryptocurrency market, as Bitcoin saw its price drop below the $26,000.
This sudden crash saw Bitcoin shed 7% of its value in 20 minutes, briefly touching a low point below $26,000. Other prominent cryptocurrencies, including Ethereum, followed the same pattern. As of the time of this writing Bitcoin is trading at $26, 448.
The last time Bitcoin hovered at this price range was in mid-June, a period marked by legal challenges against prominent exchanges like Binance and Coinbase from the Securities and Exchange Commission (SEC).
This downturn arrived shortly after the Wall Street Journal published a report detailing the sale of the remainder of Bitcoin holdings held by Elon Musk's SpaceX. The company had taken the step of writing down the value of its Bitcoin assets from the previous year by $373 million.
Although the specific amount of Bitcoin offloaded remains undisclosed, financial documents have shed light on SpaceX’s overall expenditures. $5.2 billion was reported in outflows for 2022, covering expenses ranging from property acquisition to R&D. This comes on the heels of Musk's 2021 announcement, confirming SpaceX's Bitcoin holdings and aligning with Tesla's declaration of a $1.5 billion BTC purchase – a move that propelled BTC to a then-record high exceeding $43,000.
Simultaneously, China's major property developer, Evergrande Group, sent ripples across global markets by filing for Chapter 15 bankruptcy protection in New York. The real estate giant's financial woes are speculated to have added to the cryptocurrency market’s vulnerability.
The crash also led to a significant wave of liquidations, totaling over 1 billion, according to CoinGlass. This figure encompassed $381 million in Bitcoin liquidations and $247 million in Ether liquidations, with the majority of affected positions being long positions that suffered losses as the price tumbled.
Crypto experts and analysts were quick to weigh in on these startling market dynamics. WhaleWire, a prominent figure in the crypto community, opined that the current market conditions indicate waning investor interest in cryptocurrency. This environment, according to WhaleWire, provides fertile ground for potential market manipulations.
Analyst Willy Woo noted that similar decreases in volatility had historically been precursors to a surge in cryptocurrency prices, indicating that this downturn might be a sign of a bullish phase for cryptocurrency prices.