After showing the fastest growth of the year, Bitcoin finally corrected, losing nearly $3,000 in about 3 hours, resulting in a price below $17,000. What happened?
November 26, 2020 | AtoZ Markets – At around 2:15 UTC, the price of Bitcoin (BTC) began to plummet significantly as its value dropped below a previous area of support at around $18,474.
Today’s fall marks an over 12% drop over 24 hours.
What are the reasons behind the Bitcoin sell-off?
What caused Bitcoin price to plunged on Thanksgiving? A few things. The first was an uptick in activity to exchanges. Several whales – those holding more than 10,000BTC – appeared to be moving sizeable amounts of currency onto exchanges.
All Exchanges Inflow Mean increased a few hours ago.— Ki Young Ju 주기영 (@ki_young_ju) November 26, 2020
It indicates that whales, relatively speaking, deposited $BTC to exchanges.
But long-term on-chain indicators say the buying pressure prevails. I still think we can break 20k in a few days.
Chart 👉 https://t.co/mL1j2ZqVf8 pic.twitter.com/6ErmJHrS4v
Historically, such movements are an indication of those about to exit their positions. Indeed, the chart supplied by Ki Young Ju, the CEO of on-chain analytics firm Crypto Quant shows inflows peaking just as the plunge began.
Others have suggested the re-opening of OKEx exchange, which holds some $13 billion worth of Bitcoin, was partly to blame. However, the exchange wasn’t due to open for another five hours, so there’s less of a strong signal there, but it could signal further losses later today.
Moreover, the sell-off move comes at a time when Coinbase’s CEO Brian Armstrong voiced his concerns on Wednesday night over the U.S. Treasury Department’s rumored plans to attempt to track owners of self-hosted cryptocurrency wallets.
Notably, the drop liquidated $950 million worth of positions across major exchanges, as noted by derivatives data provider Bybt.
“The latest BTC price drop is the first of many tests for new money on whether they have the vision and stomach to truly invest in BTC and the future of digital finance, or if they’ll simply repeat 2018 and wash out of the market,” said Jehan Chu, co-founder and managing partner at Hong Kong-based blockchain investment and trading firm Kenetic.
Moreover, the price of most other notable cryptocurrencies also fell with Ethereum (ETH) and Ripple (XRP). Chainlink (LINK) and Cardano (ADA) suffering the worst drops across the board, losing 18.9% and 16.7%.
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