Bitcoin has been stabilizing at the range of $29,000 to $31,000 since the end of June, but the world’s number one cryptocurrency saw a sharp plunge this morning, following the report of Elon Musk’s SpaceX offloading bitcoin from its portfolio.
Bitcoin has lost more than 10% during this period and at one point in yesterday, the price of Bitcoin dropped as much as 8% within 10 minutes.
Analysts from Cointelegraph and Coindesk pointed out a few reasons for the drop such as the article from the Wall Street Journal about SpaceX offloading $370 million worth of Bitcoin that was published just a few hours before the descend.
The Federal Reserve’s rate hike is also another genitive pressure to Bitcoin, which gives investors, funds and institutions more reasons to switch from zero-interest and dividendless assets like Bitcoin to debt instruments such as the government’s bonds, which have increasingly attractive yields.
Possibly some might use this opportunity to short selling Bitcoin on the derivative market which on the other hand, The long side speculator that got hit by the drop would fuel the fire due to force closing their position from margin calls. Data from Coinglass shows more than $420 million were wiped out last night.
At the same time, Bloomberg reported that US SEC is signaling the green light on request for Etherium Future ETF (Exchange Trading Funding). Etherium is the second biggest market cap cryptocurrency just behind Bitcoin. The trend of shifting to Etherium might also add more pressure to Bitcoin price.
Another view from market researcher said China real estate crisis causing the weakest Yuan value since 2007 might relate to bitcoin price. Back in August 2015, Bitcoin fell more than 23% in just two weeks after Yaun devalued, in which experts are stating that the trend is similar to that time.
Lastly, the relation of Bitcoin and the tech-heavy Nasdaq normally move in the same direction. Nasdaq Composite recently hit the all-year high in July at 16,000 but has been trending downward to around 14,700 as of today.