Bitcoin Price Crashes Below $22,000, These Are The Reasons
March 03 2023 - 1:45AM
NEWSBTC
In the last few hours, the Bitcoin price has experienced the most
violent crash since the collapse of FTX. The BTC price crashed by
$1,300 within an hour and briefly fell below $22,000. Remarkably,
the price drop occurred with the start of the trading day in Hong
Kong. What Are The Reasons For The Bitcoin Price Crash? Probably
the most obvious reason for the Bitcoin price crash is the
uncertainty that arose yesterday around the Silvergate bank, which
plays a major role in providing liquidity to the market by
providing a gateway to the fiat money system. The bank delayed its
filing with the Securities and Exchange Commission (SEC) yesterday.
The resulting FUD over financial difficulties caused the bank’s
stock price to plummet by more than 50%. Several crypto companies,
including Coinbase, Paxos, Kraken and Galaxy Digital have
subsequently terminated their business relationships with the bank.
Related Reading: Ethereum Price Won’t Go Down Quietly: Key Supports
To Watch However, reducing the price slump to this reason would be
too simplistic. As analyst Miles Deutscher writes via Twitter, the
headwinds for the crypto market are currently piling up. In
addition to Silvergate, these include Mt. Gox payouts, the Shanghai
ETH unlock, a hot CPI (50bps now a real possibility), mass
liquidations and equity market weakness. “Note, not all of these
necessarily have a substantive basis. But nor do they need to cause
de-risking. I think a combination of these factors led to a
correction, with liquidations exacerbating price action,” Deutscher
explained. Related Reading: Bitcoin Price Plunges 5% After
Rejection and Now At Risk of Move To $21K In particular, the
gigantic long liquidations likely played a significant role in
causing the crash to occur as strong as it did in such a short
period of time. According to CoinGlass, long positions of over $205
million have been liquidated in the entire crypto market so far.
185 million dollars were liquidated within just 45 minutes. Bitcoin
recorded the highest liquidations worth $73 million. Binance Spot
Whale Responsible? Also, analyst Skew observed a conspicuity in
Bitcoin spot CVD buckets and delta orders and referred to the chart
below. According to the analyst, a large Binance spot sale led to
the cascade of long liquidations: As you can see here Binance Spot
nuked 1 min before every other spot exchange. Significant size
behind this sell off. (Someone probably exited crypto today). Key
price $22K On-chain analysis company Santiment writes that it’s
been more than 4 months since Bitcoin fell by 5% or more in a
single hour. But an hour ago (1am – 2am UTC), that streak was
broken. “A quick recovery will be dependent on how much worry the
crowd shows, allowing whales to scoop weak-handed coins, “according
to Santiment. At press time, Bitcoin was trading at $22,374, down
4.3% in the last 24 hours. Featured image from iStock, Chart from
TradingView.com
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