Why has Bitcoin, and the crypto market as a whole, down so violently?
A big bloodbath in which Bitcoin swims with alternative digital currencies.
Bitcoin (BTC) has fallen 10% in the last 24 hours, dropping below $ 55,000.
At the time of writing this article, Bitcoin is trading at $ 55,015 with a market value of $ 1.027 trillion.
This powerful price crash resulted in nearly $ 10 billion of Bitcoin being liquidated within an hour.
When investigating the matter a bit, there was an unconfirmed tweet with news of the US Treasury imposing fees on crypto institutions for their involvement in money laundering.
An unconfirmed tweet hits the crypto market and puts it down by more than $ 290 billion
Amid rumors indicating that the US Treasury will impose fees on several financial institutions for money laundering in encrypted digital currencies.
The news has not been officially confirmed but is still a pure rumor published in the form of a tweet by the account shown below.
U.S. TREASURY TO CHARGE SEVERAL FINANCIAL INSTITUTIONS FOR MONEY LAUNDERING USING CRYPTOCURRENCIES -SOURCES
— FXHedge (@Fxhedgers) April 18, 2021
- The second and main reason that the crypto market was bleeding is the power outage in the "Xinjiang" region of China, which caused a large part of the Bitcoin network to be cut off within 48 hours.
- This interruption was due to maintenance supervised by the competent authorities after the massive floods that affected power stations in China.
- It is known that bitcoin mining is a large part of it in China, as the Chinese province of Xinjiang is one of the regions in which a large part of Bitcoin miners are active.
With these conditions, the bitcoin price collapsed dramatically, which led to a further price correction.
This confirms to Crypto Market Analyst Willie Wu that bitcoin's segmentation and price are always linked.
Thus, in the wake of the power outages in Xinjiang, today's price action has been following the collapse of Bitcoin's fragmentation.
According to Chinese miner Jiang Zhuoer, the Xinjiang coal mine accident caused power outages in all mines for safety inspections, resulting in a decrease in the hashrate of the entire network by about 21.56% and 36EH. pic.twitter.com/Fc6xJXXlxD
— Wu Blockchain (@WuBlockchain) April 17, 2021
Buying opportunity for bitcoin investors:
- With the latest data from Glassnode, Willie Wu reports that the hash has been fully recovered:
Price and hash rate has always been correlated.
— Willy Woo (@woonomic) April 18, 2021
This is BTC price vs today's hash rate collapse (from the Xinjiang blackout). pic.twitter.com/mywEZLHlA0
Thus, this drop could represent a great buying opportunity for those who have been waiting to enter Bitcoin.
Another famous Chinese journalist shares in the crypto scene an important metric called "S2F Reversion".
According to the data provided by this indicator, the S2F retracement index decreased by 1.82 against the sharp decline in Bitcoin, and according to this Chinese journalist:
Compared to Bitcoin's drop, the index has decreased significantly, which could mean a reliable buying opportunity.
According to CryptoQuant-S2F Reversion data, with Bitcoin's sharp drop, the index plummeted to 1.827126. Compared to Bitcoin's decline, the index has fallen significantly more, it may impaly a reliable buying opportunity. pic.twitter.com/b8yXf2wteI
— Wu Blockchain (@WuBlockchain) April 18, 2021
Besides Bitcoin, the cryptocurrency market overall has fallen by 13% and has lost more than $ 150 billion.
The "Wu Blockchain" account on Twitter explains that there was a big rush of buyers in the Chinese stock exchanges, but the situation turned after the "Xinjiang" incident and the news of Turkey banning payments in cryptocurrencies, and the sale of shares by CoinBase executives.
The market path turns from green to red and enters a continuous downward process until the publication of this article.