Bitcoin experienced a sudden drop in price, falling approximately 8% within a span of 10 minutes, leading to speculation from analysts regarding the potential causes.
What you need to know: Some theories include Elon Musk’s SpaceX selling its Bitcoin holdings worth $373 million, concerns about interest rate hikes, and the impact of rising government bond yields. The report of SpaceX selling its Bitcoin holdings, along with the influential role of Elon Musk, was seen as a factor putting pressure on the price.
The expectation of higher interest rates and the recent weakness in global markets also contributed to the pullback. Increasing government bond yields were highlighted as a potential cause, indicating a reduction in liquidity for the broader market. While the Evergrande crisis had an impact on sentiment towards the Chinese economy, it was not seen as a primary cause for the Bitcoin price decline.
Speculation also arose regarding a large actor making a significant sell, potentially triggering further pressure on derivatives markets. Bitcoin’s price has shown some recovery since the crash, buoyed by news of the SEC potentially approving an Ethereum Futures ETF.
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