Experts Identify Possible Causes of Bitcoin’s Decline

On the evening of August 17, the price of the first cryptocurrency fell sharply from $28,000 to $25,000, with a slight rebound by then. Community members attempted to explain the situation.

Analyst Josh Gilbert of eToro suggested that the drop may have been linked to the sale of part or all of Bitcoin by SpaceX, Elon Musk’s company, for about $373 million. sales.

«Whenever there is a loud name in the industry selling Bitcoin, especially someone as influential as Elon Musk, it puts downward pressure on the price,» the expert wrote.

In his view, another reason for the drop in the price of digital gold could be the rapid shift in market sentiment amid the Federal Reserve’s rate cut.

Market analyst Tina Teng of CoinMarketCap believes the primary factor behind Bitcoin’s sell-off was the recent rise in government bond yields. Strengthening yields typically signal lower liquidity in the broader market, she explained.

In addition, Teng added that Evergrande’s crisis, the Chinese developer, which filed for bankruptcy, could have indirectly affected the asset’s price.

Head of research at Matrixport Markus Thielen noted that the risk of yuan devaluation played a significant role in the sale of Bitcoin.

«In August 2015, when China last devalued the yuan, Bitcoin prices fell by 23% over two weeks. Before a more substantial rally began, the asset finished the year up 59% from the devaluation level,» Thielen explained.

TheFlowHorse trader suggested a large sell-off by one of the big market players. The expert described the situation as “pure speculation.” He believes an unknown whale could have sold its asset holdings after Valkyrie filed for a futures Ethereum-ETF.

According to data from CoinGlass, $265 million in Bitcoin positions were liquidated in the last 24 hours.

Earlier, Fundstrat co-founder Tom Lee predicted Bitcoin at $150,000 if the U.S. SEC approves a spot Bitcoin ETF.