BTC, ETH Drops 9%: Why The Drop?

SUMMARY

• Bitcoin and Ether price dropped by over 9% in short time frame
• The decline may be due to the bankruptcy of China Evergrande, a prominent property developer, and alleged rumors that SpaceX sold its Bitcoin holdings.
• Over 174,000 traders have been liquidated of $1.04 billion in the past 24 hours.
• The overall cryptocurrency market capitalization is down 5.89% in the last 24 hours.

In a surprising turn of events, the cryptocurrency market experienced heavy volatility as Bitcoin, which had remained relatively stable around the $29,000 mark over the last several weeks, suddenly plummeted by about $3,500 in a swift downward spiral. As of writing, Bitcoin is sitting at $26,400, rebounding from yesterday’s lows of $25,200.

Thursday witnessed a sharp decline in Bitcoin's value, with a staggering drop of over 9%. The crypto community is already labeling this event as a "flash crash." The exact reasons behind this sudden nosedive remain somewhat unclear, as multiple theories have been circulating. 

Evergrande Files for Bankruptcy, SpaceX offload Bitcoin

The decline began shortly after Reuters reported that China Evergrande, a prominent property developer, had filed for bankruptcy protection in the United States. Concerns swiftly emerged that the real estate crisis in China could potentially trigger ripple effects throughout the global economy, possibly impacting the cryptocurrency market.

Simultaneously, the price of Ether, experienced a decline from $1,800 to $1,550, per data from Binance. However, Ether swiftly managed to regain some of its losses and stabilize at $1,695, as of press time.

Additional speculation emerged as a Wall Street Journal report surfaced regarding aerospace technology company SpaceX's alleged sale of approximately $373 million worth of Bitcoin. Space X’s Bitcoin holdings have been amassed since 2021. 

According to data from crypto derivatives analytics platform Coinglass, 174,892 traders have been liquidated of $1.04B over the past 24 hours, with Bitcoin long and short positions coming in at $843.83M and $196.13M, respectively. 

The overall cryptocurrency market capitalization currently sits at $1.07 trillion, declining by 5.89% in the last 24 hours, per data from CoinMarketCap.