Why Is Bitcoin (BTC) Price Dropping Suddenly?
Despite previous attempts to end the month on a bullish note, the Bitcoin (BTC) price is rapidly losing accrued gains amid a warming market. At the time of writing, Bitcoin is trading at $67,328.02, down 1.64% in 24 hours. This follows a 0.99% decline in the combined crypto market cap.
Bitcoin Price and Bear Market Motivators
Bitcoin price stabilized following the release of Personal Consumption Expenditures (PCE), the Fed’s preferred inflation gauge, which rose 0.2% in April as expected. Shortly after the market welcomed this report, news of the hack of the Japanese crypto trading platform DMM Bitcoin visibly upset the market balance.
Hacking events like this have a generally bearish impact on the market. With more than $305 million withdrawn from the trading platform, many investors are starting to relive their Mt.Gox and Coincheck experiences. These two trading platforms had a larger loss profile compared to DMM Bitcoin and there was a converging trend; all were of Japanese descent.
While it is too early to speculate on its potential impact on the overall market, investors are acting on a momentary impulse to avoid getting caught up in any erratic downtrend.
The Bitcoin price drop is also due to the price being over $8 billion in the BTC and Ethereum options market today. This consists of 69,000 Bitcoin options worth $4.7 billion and 920,000 Ethereum options worth $3.5 billion. This is a significant dilution that gives the market higher leverage than usual.
As Deribit data shows more long positions for Bitcoin price, it seems safe to assume that this current slide will disappear soon.
Bitcoin Is Immune to Growth
Despite the unexpected trend in the market, Bitcoin price has a huge growth immunity to watch out for. The institutional demand base remains solid, with spot Bitcoin ETF products from leading issuers such as BlackRock and Fidelity Investments.
Recently, Hong Kong and the United Kingdom also joined the United States, Canada and Brazil, among other countries, with spot Bitcoin ETF and other related products. The asset is likely becoming mainstream, which could provide a fundamental basis for a price recovery in the short term.
Legendary trader Peter Brandt predicts an early cup and handle formation for the cryptocurrency, taking advantage of the explosive potential of Bitcoin price. The cup part is fully formed and the handle model has not been formed yet. Peter Brandt hints that a breakout in BTC price is approaching, and this confirmation comes after a downtrend breakout.
Read More: NYSE Chairman Praises Bitcoin ETFs and the Liquidity They Bring to Markets
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-life applications of blockchain technology and innovations to ensure mainstream acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture. follow him excitementLinkedIn
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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