The entire Bitcoin market dropped by 11.3% on Thursday the 11th of June, 2020 as the market ended with a sudden drop from $10,160 to $9,012 on BitMex. The 11.3% drop saw the top cryptocurrency by market value register its biggest single-day decline in two weeks, according to Analysts. This coincided with a staggering 5.6% drop of the Dow Jones Industrial Average (DJIA)
Prices briefly hit lows near $9,012, a level is last seen on May 27, and here are 3 reasons why Our Business Analysts think this happened at Patricia.
The Liquidation of $78 million worth of longs, correlation with the stock market since March 2020: Bitcoin initially showed resilience by holding above $9,700 during the Asian and European trading hours. However, the sell-off in U.S. equities was too big to ignore for the crypto market traders — some of whom likely offered bitcoin on the fear that financial markets could be about to witness another round of panic like that seen in March.
On March 13, the price of Bitcoin plummeted to as low as $3,600 on BitMEX. This move liquidated over a billion dollars in futures positions. The downtrend was so strong that BTC technically could have hit zero.
On June 11, there were indications of a 900-point drop from pre-market data of the Dow Jones right before the price of Bitcoin dropped to as low as $9,012.
Uncertainties across all assets classes: This likely fueled a short-term drop-in BTC as equities dropped, the price of Bitcoin followed. The stock market correction did not necessarily cause BTC to decline likewise, Gold fell by 1% in two hours, despite its momentum since June.
Big on-chain transactions, especially ones related to controversial wallets and addresses, can create panic in the cryptocurrency markets. On Thursday, hackers moved over 400 BTC (or $4.1 million worth of cryptocurrency) stolen from the cryptocurrency exchange Bitfinex to unknown wallets, according to twitter bot Whale Alert.
A few investors then began speculating about a price dump. At that time, bitcoin was hovering around $9,900. These transfers happened in 20 transactions during the Asian hours and were noted by the crypto market community.
The fears that hackers are preparing to dump large numbers of coins may have caused some investors to exit the market. Another big transaction worth $1.3 billion executed by an unknown wallet also elicited a similar response from the investor community.
- The $10,000 to $10,500 range has served as an important multi-year resistance range. Sometime in October 2019 and February 2020, the price of BTC fell by 39% and 65% following the rejection of $10,500.
Bitcoin has failed multiple times to establish a lasting foothold above $10,000 since the May 11 mining reward halving. Markets often test dip demand following multiple rejections at key resistance.
For now, data from ByteTree suggests miners are not selling more than they mine on a daily basis which is around 900 BTC per day.