Topic: What cause Bitcoin to drop up to 42k$? (Read 424 times)

Currently all coins are being corrected in the market, not even just bitcoin, for other coins to feel the current market correction, bitcoin prices will return to normal by the end of this year, if you look at the trend towards bitcoin in the past few months, then the opportunity will be very possible and I believe bitcoin at the end of the year will be above 40K $ or even more than that number, but in the crypto market anything can happen, both bitcoin and other altcoins.

I think the liquidity crisis of a property company like Evergrande Group makes investors and whales worried, and this makes the cryptocurrency market experience a price decline like what is happening now, the occurrence of liquidity for a large company like evergrande will certainly trigger worries for big investors and also whale, so they liquidated the crypto funds they had so far and of course this further exacerbated the price decline that occurred in bitcoin.

Profit taking is always a large part of action, mostly its best to look for triggers and this time it was the wider market I think combined with prior gains in BTC and volume still overhead at the highest prices for 2021 which has sellers in there who bought rashly now wanting to sell on these wider market doubts.

The mythical whales argument is unfortunate, most of the market action occurs through consensus.  A whale cant turn the tide, they will get beached on the shore even the greatest of animals can be stranded alone, if any trader leaves liquidity it ends badly for them.  Wider market is bigger then that idea of puppet master large buyers.

No idea whether the FUD was prevalent when the correction started, when the market was showing weakness i could not find any reason and then all of a sudden an article popped up about the crisis in China and people are turning to safer assets. These are all narratives that people always find whenever there is a correction and today the market is recovering.


The government cannot bail out everyone, if they keep printing money then eventually they will reach a point of inflation.

I am 90% sure that it was the whales that wanted to manipulate the market, that seems like the most logical argument. I am not saying bitcoin doesn't drop without whales, it does drop but not this quickly and it dropped way too quickly for it to be retail investors.

It means that it was man made since it was that quick, one thing happened that caused it to go down and if it is one thing then how could it be thousands or even tens of thousands of people all together. Was there a party called "let's all sell our crypto all together" that thousands joined that I am not aware of? If not then it was whales that collectively got together and dropped it (or even maybe one big whale) which caused the drop. It is temporary and I am not worried at all, we will get it higher soon enough.

Though no one can surely predict on cryptocurrency. But i don't think that Bitcoin price will drop below 30k$. Bitcoin price is now so much volatile. Also in cryptocurrency price increasing and decreasing is a simple issues. When a lot of people sell Bitcoin by getting panicked by any negative issues or fake news or signals then the price going to decrease. Again when a lot of people or a lot of Bitcoin buying by people then the price going to increase. I think Bitcoin price will recover as soon as possible and again it will hit $50k.

I think the stress is just a normal level of protection for investors, you can subjectively think that the impact from the Chinese real estate group is not so severe that crypto has to go into recession and drop but this ghost haunts other investors more, they feel the financial storm will erode value as well as force some businesses or individuals to sell assets such as crypto to stabilize losses from the Chinese stock index. But pretty quickly there were voices of encouragement from the banks and eased the worry, as you say, the government will have bailouts to not cause more damage.

This is another typical movement of bitcoin and we will lose if we sell to early that's why its better hold if you buy at the top also accumulate at the dip to recover what you supposed to be lose when the price got dump although its easy to say this but we need to see what is the possible last dip to come and look where the strong support on so that we can hit the right spot to earn again once bitcoin bounce back after the dump happen.

It is good to see bitcoin is back to the green candle, but there is no guarantee that bitcoin can increase to the high price as the price can get dumped again. Maybe the bitcoin price is down because of something happening out there but we do not know what is causing the price to go down and only guess. Hopefully, this will bring a positive trend to the market so the price can increase more than now, although we might see another correction later.

Again, Bitcoin is very volatile, so these ups and downs are par for the course. Don't gamble an amount that would burden you're family.Bitcoin today is rising up to 43k$ after reaching 40k$ so I think market is now slowly going back on its track to 85k$ to100k$ at the end of year 2021.

I think that most of the reason can be attributed to straight up FUD.

The Evergrande crisis in China should have absolutely nothing to do with crypto, but people are way too overreactive and tend to assume that this is the case.

Plus, it'll be a similar event to COVID - the government will bail out the financial sector and there will likely be no harm done anyway.

It's not about the word but by the times you're using it, the moment you reach 1 mention per line it does pose serious questions.


Not surprising at all, if it weren't for the price increase you wouldn't have seen any increase, going by the "surprising" thing you might actually think that calling bitcoin an asset is what fueled the growth. You see, this happens when you speculate that much and you see things where there is nothing.


And it was a link, and it's a pretty obvious one.
If you reach 99% unemployment and people run out of money then every bitcoin will be worth shit as there is simply no money out there to invest, guess what people who have coins and have lost their jobs and business will do? Sell! This was no economic crisis scare, it was at that time seen as a possible catastrophe, it's normal people would be scared.


The last time the stock market coughed a bit harder it sent us back a decade, calling it irrelevant even if you're speaking of bitcoins or scarecrow manufacturers is just silly. Like it or not that's where the power is and it will be for a long time from now on.

Finally, I can agree with you on something,

I also believe that anyone who thinks for real he can predict market movements accurately over short intervals is just full of shit, you either are a complete moron or a scammer trying to earn money from people who trust you.

That being said, although I do appreciate your points I still think you've gone lately a bit too far into those conspiracy theories where everyone is against bitcoins and everything bad is caused by stupid people who don't know better. Remember that the ones selling are the ones that bought, without them the price wouldn't be here in the first place, without traders there wouldn't be that much activity either, and most important, bitcoin was about freedom, they own those coins they can do whatever they do with them, calling them any names, accusing them of x and z, blaming everything on random poeple shows one thing, that a community is becoming toxic to the outsiders. Never! has this ended well.

Oh and just to mess a bit with you 


TSLA 20 March $85 now  $747, 778% sounds pretty nice to me 

if you look at the current market conditions the potential for bitcoin prices to drop below $40k is very large. I don't know if this price drop is a normal price drop or an early indication that bitcoin is going into a bear market again. I hope the bitcoin price won't drop to this year's low of $29k as that could trigger an even bigger price drop.

Hopefully, we will not see the price is in under $30k this month or next month because if that happens, I can not imagine how panicked people see it. They will sell their bitcoin temporarily and wait for another time to buy back Bitcoin at a low price because they think that bitcoin can down for more if the price is below $30k. Many reasons why the bitcoin price drops this month but we can not know the truth and only guess and speculate. But bitcoin will rise at the right time and who knows, that time will come in the next months.

Well lets call it a narrative change if propaganda is a strong word.

When I look back at the history, from the inception of bitcoin up until early 2017 the term "asset" is rarely used to describe bitcoin. However, the biggest narrative change starts in early 2017 as bitcoin starts being referred to as an asset and a store of value while the "currency" definition is starting to disappear. Surprisingly this is the same year when payment processors (representing the usage of bitcoin as a currency) are reporting ATH in number of payments they are processing!

In the same time frame (2010 to 2017) people compare bitcoin with anything they can but calling correlation is going too far. We also don't see any significant panic sells each time stocks dump and most of the times bitcoin remains indifferent and actually goes up.
Then from 2017 the somewhat new narrative is pushed that there is a link between bitcoin and other assets (gold, stock, equities, bonds, commodities, etc. only focusing on US and China!). There are hundreds of articles focusing only on times when bitcoin reacted to dumps in those other markets while ignoring any other time when it didn't and also interestingly enough ignoring the "rise" part. The narrative is mostly ignored since price is reacting wildly during 2017 and is smashing through a new ATH regularly. But then comes 2018 and the attention to this narrative is increased specially since there is a huge wave of newcomers who can't fathom why price keeps going down (the bubble pop) and later on why it isn't setting a new ATH every week (during accumulation of 2019). So they seek justification and find these articles.
We still see very weak reactions to stock market dumps similar to before.

Finally we get to 2019 and the turning point in history of bitcoin. The COVID pandemic begins and there is a[n almost] global economy crash and bitcoin drops significantly at the same time. The narrative from this point gains a very strong footing and people start believing that there really is a "link". The result is that nowadays we see panic sells 90% of the times when US stock market dumps.

So the only thing I see changing is that people eventually believed this narrative. Otherwise there simply isn't any logical reason why the price of this global decentralized currency should be affected by something as irrelevant as how US stock market is behaving!

---

If I wanted to give as unbiased an observation as I can about the "cause" of this drop (and similar drops) I'd say that people have always been trying predict bitcoin price and have been failing. Specially since Technical Analysis doesn't work very well for bitcoin. However, they don't stop predicting; instead they start finding new methods of prediction. If I wanted to give a list of ways people try to predict bitcoin price in decreasing order of stupidity:

1. Predicting price based on number of tweets Economics Letters, vol 174, 2019
2. Predicting price based on Google trends Do Google Trends forecast bitcoins?, Journal of Banking and Financial Technology, vol 5, 2021, BitCoin meets Google Trends and Wikipedia, Scientific Reports, vol 3. 2013 (second one is correlation not exactly prediction)
3. Predicting price based on hashrate
4. Predicting price based on number of on-chain transactions
5. Predicting price based on amount of bitcoin moved (notably the scammers over at whale-alert.io)
6. Predicting price based on other asset movements specifically US stocks. Journal of Derivatives and Quantitative Studies, 2020
7. Stock to flow model

Any of these silly theories have their own followers, some more than others. Whenever one of them takes place or someone abuses their naivete and gives them a signal (like scammers at whale-alert sending them a tweet about "a whale dumping", Google trends dropping, or their twitter feed saying Evergrande dumped and S&P followed) these "followers" immediately and blindly dump their bitcoins hence causing the drop in short term.
I still wouldn't call any of this "correlation" since it looks more like "lack of experience among day traders" which is then abused by market manipulators giving them the signal.

we can see chart patterns every week, month and year all look up and down, pump so sharply and then fall. so the market fell at $42k, it's still normal, because the next day it will be pumped again even though it's not 100% at least experiencing a positive movement. The problem that causes the bitcoin price to rise is various factors, it's not a big problem. smartly you understand it, so that there is no panic sell in the future.

You know, many people say that Bitcoin is currently weakening, but that doesn't mean Bitcoin will lose its popularity in trading and investing. Regarding the cause, of course there has been negative feedback and certain issues regarding Bitcoin which is currently at its peak, but I don't think that it will result in a sharper decline until it hits $30k.
Surely there are still the people who decide to buy or re-enter to invest, and in it of course rich people will be there. I'm more sure that soon it will be in a high trend again.

The only relation between Evergrande group and Bitcoin dump I can think about is if the company needed to sell their BTC holdings (in case their had it) at once in order to pay their increasing debt with China's government. Because for me it really doesn't make sense to say Bitcoin is losing price because investors are avoiding stocks market.

It would be more logical to see bitcoin rising if that was the scenario, because when investors aren't confident in traditional markets they have crypto currency and more specifically Bitcoin as a safe heaven.

When people have no way to explain something, they just match different situations happening at same time to conclude one is the cause and the another is the effect.

I don't think that news caused the decline. I saw that there were so many FUDs being spread, so we can conclude that a group of people are still trying to drop bitcoin to the bottom, so FUD will continue to spread, but the real support point will be no less than $30k is probably the low point.

Because there will always be many causes but it's all temporary for me and we must be strong in this case don't be influenced by bad things, keep your assets.

Maybe in the next few days there will be a FUD.

That is the advantage of Bitcoin and other cryptocurrency, it is very risky but that is also the reason why we gain profit from cryptocurrencies. There is some people who are controling Bitcoin they are what we call big whales, never be a prey by them by holding your coin.