Bitcoin drops to new two-month low. An unexpected and major sell-off in the crypto markets had jolted Bitcoin.
Thursday witnessed a notable 7.2% decline in bitcoin, marking its most significant single day drop since November 2022, a period marred by the collapse of the prominent exchange FTX. Most of the long liquidations occurred on crypto exchange OKX, accounting for nearly 40% of the entire market.
Subsequently, during the Asian trading hours on Friday, the cryptocurrency experienced a dip to a two-month nadir of $26,172, a level not seen since June 16. As of 0835 GMT, a partial recovery had taken place, with bitcoin edging up to $26,441, though still down 0.8% for the day.
Some claimed that unproven bitcoin sales by the space exploration company SpaceX were to blame, while others suggested that China Evergrande’s bankruptcy may have contributed to the decline. However, neither of these occurrences is the most likely reason.
A Wall Street Journal report late Thursday, citing internal company documents, noted Elon Musk’s SpaceX had written down the value of its bitcoin holdings in 2021 and 2022 and has sold the cryptocurrency. But that report came out before the plunge, and there’s zero evidence the company sold again Thursday.
According to professional traders, the abrupt decline is more plausibly attributed to market structure and liquidation events rather than a single fundamental trigger. Additionally, the market has displayed a state of relative illiquidity and stability, establishing an environment conducive to unexpected fluctuations.
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