The sudden drop in Bitcoin’s BTC/USD value on Thursday, which led to an 8% decline within the last 24 hours, has sparked theories about the causes behind this unexpected market turmoil.
Theory 1: Elon Musk’s aerospace company, SpaceX, has reportedly sold its Bitcoin holdings, contributing to the recent price dip and leaving the cryptocurrency community bewildered.
According to The Wall Street Journal, SpaceX recorded $373 million worth of Bitcoin on its balance sheet in 2021 and 2022.
Crypto analyst Joe Burnett believes that Bitcoin’s price decline was triggered by news of SpaceX’s BTC sell-off. "Traders are now bearish that coins are in stronger hands. Illogical."
The co-founder of Dogecoin DOGE/USD weighed in on the situation, finding it amusing how the past sale of Bitcoin by SpaceX is causing a crash at present.
Theory 2: The release of minutes from the Federal Reserve’s last meeting created additional uncertainty. The minutes suggested that future interest rate increases might be necessary, negatively impacting risk sentiment and causing a drop in Bitcoin’s value.
The market turbulence resulted in significant losses for traders who had placed long positions. CoinGlass data reveals that approximately $823 million worth of long positions were liquidated, with Bitcoin traders experiencing $488 million in liquidations and ETH traders suffering $303 million in losses.
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Theory 3: In addition to SpaceX’s Bitcoin sell-off, other significant events in the financial world have contributed to the market unease. China Evergrande, a major property giant, recently filed for bankruptcy protection under Chapter 15 of US bankruptcy law.
This decision followed the company’s postponement of meetings for debt holders, allowing more time to assess a restructuring plan.
Price Action: At the time of writing, BTC was trading at $26,402.90, according to Benzinga Pro.
Photo Courtesy: Pixabay
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