On Thursday, three critical bearish incidents sent Bitcoin (BTC) price to $25,200. On-chain data explores why Bitcoin price tumbled and likely price action to anticipate in the coming weeks.
On Thursday, Bitcoin dropped briefly tumbled below $25,200, its lowest since early June. A bearish $373 million trade by Elon Musk’s SpaceX had set the initial downtrend in motion. However, two other seemingly unrelated material events have since unfolded.
Why Did Bitcoin (BTC) Price Crash to $25,000
Three factors have been identified as the major catalysts behind the BTC price crash on August 17.
Chiefly, a Wall Street Journal news report revealed that Elon Musk’s SpaceX wrote down the value of Bitcoin (BTC) it owned by $373 million before selling it all off. Within hours of the report, the BTC price wobbled below the $27,500 support territory.
Furthermore, shockwaves from the news of Chinese real-estate giant Evergrande’s bankruptcy filing also could have contributed to Bitcoin’s sharp retracement.
These two major bearish events combined to trigger the third —massive liquidations across the crypto markets.
According to a blockchain analytics platform, Coinglass, more than $834 million crypto Long positions were liquidated within 24 hours. The chart below shows that Bitcoin traders took 40% of the heat, with more than $499 million worth of Long BTC positions nuked.
In the context of crypto margin trading, a Liquidation event is triggered when the asset’s price drops significantly, and resulting losses exceed the value of collateral or “margin” put up by the trader.
The chart above means investors who took Long/Positive positions on BTC have assumed more than $499 million in losses within the last 24 ho
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Author: Ibrahim Ajibade
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