Why Is Bitcoin And The Crypto Market Down Today?
May 12 2023 - 2:15AM
NEWSBTC
Bitcoin price continues to fall, dragging the broader crypto market
down with it. BTC is down 4.52% in the last 24 hours, while ETH is
down 4.10%. With a current price of $26,289, Bitcoin records its
lowest value since March 14 this year, when the price dipped as low
as $26,544. Why Is Bitcoin And Crypto Down? As always, the reasons
for the deep pullback of the Bitcoin price are complex. Remarkably,
there was actually good news on Wednesday, May 10, as the CPI
continued to fall causing the Bitcoin price to rise as high as
$28,317. However, then fake news about an alleged sale of 9,800 BTC
by the U.S. government shook the market. The Bitcoin price flash
crashed as a result and has seemingly not been able to recover
since. But this narrative is only half the story. A variety of
other factors are currently weighing on the crypto market: the
dollar index (DXY) is currently experiencing a bounce and was
recently able to hold above the historically important support, the
liquidity issue intensified once again with the departure of US
market makers Jump and Jane Street, BTC formed a (supposed) head
and shoulders pattern in the 1-day chart, the congestion of the
Bitcoin and Ethereum blockchains and last but not least a lot of
FUD (US government selling, Binance US and Grayscale). Related
Reading: Whales Keep Buying Bitcoin, What They Might Know That You
Don’t Not surprisingly, uncertainty in the Bitcoin and crypto
market is currently quite high. The Dollar Index (DXY) is
currently hovering above historically crucial support at 101.8.
Since early April, DXY has already been suspiciously close to
support, but has so far been able to fend off any attack from the
bears. As Christopher Inks of Texas Wet Capital writes, the DXY saw
another move higher yesterday (to 102.056) and is currently
preventing a rally in risk assets: The $DXY rally is making longs
difficult this morning. So, if you’re trying to get long on
risk-off assets it’s best to wait and watch for a bit. Liquidity
Issues, A Bearish Chart Pattern And FUD Another bitter blow to the
crypto market on Tuesday was the news of Jump and Jane Street’s
departure from the U.S. crypto market. The move by the two major
market makers comes as a result of regulatory uncertainty in the
US. As NewsBTC reported, liquidity has been a huge problem before,
which could now get worse. Due to low liquidity, higher volatility
is likely as larger buy and sell orders move the market faster. In
addition, a (supposed) head and shoulders pattern on Bitcoin’s
1-day chart is currently causing fear among traders. The pattern
may signal a crash to $25,000. A clean H&S reversal pattern
that could send #Bitcoin to $25k or lower in no time. 2D time
frame. pic.twitter.com/FllMuJZlQP — PROFIT BLUE (@profit8lue) May
6, 2023 Adding to the uncertainty has certainly been the congestion
of the Bitcoin blockchain by Ordinals and the controversial BRC-20
meme coins, which are seen as a DDoS attack by part of the
community. Although 300,000 transactions are still waiting for
confirmation in the mempool, the problem is slowly easing. Related
Reading: Winner Takes All: Bitcoin And DXY Compete For Global
Financial Dominance The popularity of Bitcoin Ordinals transactions
is declining. Trading volume has dropped for three consecutive days
after reaching an all-time high of $18.13 million on May 8.
Yesterday, trading volume fell to $4.86 million. The number of
transactions has also dropped from 17,000 to 6,000. UniSat’s market
share has dropped from 80-90% to 50-60% currently. #Bitcoin block
size war 2.0? 👀 According to Dune data, transactions through Unisat
have grown exponentially since the beginning of May. 🚨 Unisat, the
core wallet of BRC20, is developed by a Chinese development team of
the BSV community. pic.twitter.com/DfW46mbhZb — Jake Simmons
(@realJakeSimmons) May 11, 2023 Last but not least, there are
currently some unconfirmed rumors (FUD) circulating about Binance
US and Grayscale. Binance US caused a stir in the last few days
because the Bitcoin price showed a high price premium. The reasons
have been the subject of much speculation. Grayscale is currently
being hotly debated because DCG supposedly owes bankrupt crypto
lender Genesis Trading about $575 million in May, with the loans
coming due next week. The rumor says that Grayscale may be selling
something on Coinbase to cover the capital needed to repay the
loan. At press time, the Bitcoin price stood at $26,289, initially
receiving support from the 100-day EMA. Featured image from iStock,
chart from TradingView.com
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