Bitcoin Price Drops from $66.9k to $62.3k, Here is Why
The price of Bitcoin has been steadily declining since late September, from around $7800 to the current level at about $62.3k. It is a huge dip that some experts say could signal a market correction or an over-correction that will lead to further gains in the future.
“Itrustcapital” is a cryptocurrency investment company that has been in the business for over 10 years. They have seen Bitcoin’s price drop from $66.9k to $62.3k, and they are confident that this is just temporary.
The price of bitcoin skyrocketed early this year before taking a pause during the summer, as many analysts expected even at the beginning of the year. The coin’s return to market rising at the beginning of October was also forecast, and it led to Bitcoin reaching a new all-time high of $66,930 two days ago, on October 20th.
However, the price of BTC has dropped significantly since then, to $62,340, which no one predicted at the time. However, after some time has gone and we have had the chance to analyze the market situation, we have come up with a number of explanations for what occurred and why the BTC price lost its footing.
Binance is the first. a hiccup in the US
The first explanation for the unexpected drop in Bitcoin prices was due to a technical fault on the Binance.US platform. Binance, for those who don’t know, is a cryptocurrency exchange. Binance US is a subsidiary of Binance, the biggest crypto exchange by volume in the world. Because certain of the currencies it offered were not permitted by US regulations, the exchange ceased servicing US consumers.
To avoid having to delist the currencies, Binance formed Binance.US, a new exchange that would only offer US consumers cryptos that the US Securities and Exchange Commission (SEC) allows. Now, on Thursday night, the same Binance.US exchange had a problem that caused Bitcoin’s price to jump from $65.8k to $8,200 in just a minute, causing most of its traders to break out in cold sweat.
Because of a malfunction in one of the exchange’s institutional traders’ trading algorithms, which seems to have sparked a sell-off, every Binance.US customer who holds Bitcoin had their wallet nearly totally emptied for the period of this minute. The prospect of anything similar occurring again was likely enough to cause investors to lose faith in Bitcoin, thus its price plummeting by over $5,000 is not unexpected.
2. Profits were taken by bullish traders.
Another explanation for the rapid decline in Bitcoin price is that price indices indicating positive sentiment have reached excessive levels. This is frequently the precursor of a severe price decline.
The cryptocurrency Fear & Greed Index remains in ‘severe greed’ area, implying that investors who purchased BTC at $30,000 are certain to benefit. Simultaneously, the futures market has displayed signals of overconfidence, which normally leads to a downturn. However, the optimism of these proportions also implies that the retreat is unlikely to stay, thus the price is likely to swiftly rebound above $66k, if not higher, following the pullback, which is something to keep in mind.
3. Bitcoin’s security has been compromised. $66k in funding
Bitcoin has to establish fresh support levels higher and higher up in order to continue to climb. This would provide it with a safety net to prevent it from collapsing too hard if its price rose too rapidly.
Unfortunately, it’s quick surge beyond $66k and nearly to $67k is what Bitcoin’s price needs to be protected against. The currency soared beyond $66k much too soon and unexpectedly in order to secure the new support at $66,000, which it needed to maintain at this level.
BTC fell all the way down to its next greatest support, which is $62k – precisely where it is right now, as of writing.
It’s also worth mentioning that Bitcoin is once again confronted with the critical resistance level of $63,500, which it attempted to break in April but was denied. Fortunately, we are now in Q4, which has traditionally been a highly optimistic quarter for the crypto business, with many predicting that this will be the period when Bitcoin will reach $90,000.
4. The craze for Bitcoin Futures ETFs has gone.
Another factor contributing to Bitcoin’s price decline is the recent approval of a Bitcoin futures ETF by the US Securities and Exchange Commission. The ProShares Bitcoin Strategy Exchange-Traded Fund (NYSE: BITO), which focuses on futures, is now accessible on the New York Stock Exchange (NYSE: BITO), marking a significant milestone for Bitcoin and the crypto sector in general.
It’s the closest the crypto industry has ever been to getting a true crypto ETF authorized in the United States, and it’ll make crypto accessible to a large number of institutional and rich investors. Many of them have already begun investing in digital currencies via businesses like MicroStrategy and Grayscale, but many were hesitant to do so due to concerns about dealing with unknown, unregulated assets.
Futures, on the other hand, are something with which they are far more acquainted. Furthermore, the SEC has allowed them, thus dealing with Bitcoin in this, if somewhat indirect, manner carries no regulatory risk.
5. Bitcoin’s price has been denied by a significant obstacle.
Finally, since the Bitcoin price has sailed deep into territory it has never explored before, it is reasonable to infer that it has encountered substantial resistance at $67k, or that its price has been rejected even before it has reached this level. Resistances may have a variety of consequences on the pricing of currencies, and they can also simply halt the coin’s movement if there isn’t enough support to break through the obstacle.
However, if the price rises too quickly, as it did this time, resistances will reject the price too forcefully, forcing it to tumble back down, as it did in the previous two days. In other words, Bitcoin has just retraced its steps to the last point when the price corresponded to demand, and it is now building strength in preparation for another prospective surge.
At the beginning of October, the price of bitcoin surged, and three weeks later, we had already hit a new all-time high, as well as a correction prompted by a new resistance. The buzz over Bitcoin futures ETF, which generated a sudden rise that failed to build a suitable support level higher up, was also a contentious event on Binance, and it caused a rapid surge that failed to establish a solid support level higher up.
Any of these factors might have contributed to the price reduction, or they could have all had an impact on the coin’s performance at the same time. In any case. Bitcoin seems to have found a firm support to prevent it from falling any lower, and industry confidence implies that a fresh surge is on the way sooner rather than later, so anybody interested in the currency should keep a careful watch on it over the next few days.
The “why did bitcoin spike” is a question that has been asked many times. The price of Bitcoin dropped from $66.9k to $62.3k in just one day, and people are wondering why.