I saw that people who made an unverified tweet caused panic. Sudden sales came as a result of this panic. For this reason, it initiated gradual liquidations in the crypto derivatives market, coupled with a drastic drop in Bitcoin's total mining hashrate.
Bitcoin fell below $ 51,000 late Saturday due to the forced liquidation of long orders.
A number of bad news triggered sales, but only one of them was verifiably correct.
Volatility may continue this week as many indicators point to the "buy bottom" movement.
Bitcoin and the wider cryptocurrency market have seen one of the most terrible crashes, leading to $ 9 billion in liquidation. There were three main sources of negative catalysts.
Money Laundering News
While Bitcoin's price dropped to $ 50,900 on Binance.
A decrease of 12.3% occurred from 23:15 within 20 minutes. The decline apparently was triggered by a tweet posted about an hour ago claiming that the US Treasury is investigating financial institutions for illegal crypto use.
While the unconfirmed source was the last bearish point, downward pressure was increasing in the market throughout the day.
The Bitcoin mining hash rate dropped 40% per week after an accident in the Chinese coal mine stopped operations in the entire Xinjiang region. The big change raised concerns about China's dominance over the market, and one region affected almost half of the total hashrate.
Finally, yesterday's rumors of Coinbase executives' sale of COIN stocks also ironically weakened the morale of the rising market last week for the same reason.
The fake Twitter account Crypto Randy reported yesterday that the chief product officer and financial officer on the exchange sold almost all of his shares at its Wednesday launch.
The COIN fell from its $ 430 high to $ 309 the day after its debut.
However, financial experts disputed these claims and speculated that some sort of confusion and the inability to distinguish between real stocks and options contracts led to misunderstanding. Eric Yakes of the CFA, who brought the issue to the agenda on Twitter, deleted the tweet. He noted that Coinbase executives only hedge their assets, and that figure is still likely over 90%.
Sales Arrived
The liquidation price of extremely leveraged long-focused Bitcoin and altcoin orders, especially Binance, has been completely deleted. As traders were forced to sell at these prices, it increased sales, creating a domino effect on the price.
Over $ 9 billion was liquidated, mostly on long orders, and Binance users accounted for about 50% of the total amount. Huobi, ByBt, and Okex each recorded over $ 1 billion in liquidations.
The financing rate for permanent contracts dropped to levels not seen since the March 2020 crash. The biggest purge since the collapse shows that the worst is left behind.
The Coinbase Premium indicator also saw a "buy at bottom" action, where the larger difference between spot prices in Coinbase Pro and the derivatives market indicates strong buying action by institutions.
However, the confirmation of local lows guarantees consolidation above today's lows in the coming days.
I think that such corrections will occasionally occur as a result. I think that it is necessary to be patient and reach the result with the right decisions without haste and panic. Profits to all of you.
The sudden drop in BTC caused me panic as well. There was an unexpected move. Also, your article summarizes the situation well Thanks