6 Reasons Why Bitcoin Dropped to $ 17,000
Bitcoin has lost more than $ 2000 in the last 24 hours and hit the daily low of $ 17,253 on the Bitstamp exchange at 06:32. There are six reasons for this anticipated major correction, even though many traders were caught off guard.
- Mnuchin Bomb
The cryptocurrency decline accelerated after Coinbase CEO Brian Armstrong voiced concerns over hasty crypto wallet regulations by Treasury Secretary Steven Mnuchin, who was leaving at the end of the year:
If this cryptocurrency regulation happens, it would be a terrible legacy for the US and bring long-term negative effects. In the early days of the Internet, there were people who wanted it to be regulated like telephone companies. Thank God they didn’t.
Mnuchin, who was told by President Donald Trump to “go after” Bitcoin, brings the risks of crypto currencies in a lot of language.
2.A Rigid Refusal While Close to ATH
On November 25, Bitcoin once again failed to exceed its all-time high of $ 19,775, with 1% remaining to reach. The leading coin reached a new 2020 high of $ 19,490 at 16:50 before correcting to $ 19,131 just five minutes later.
- Overheated futures market
Funding rates on the leading exchanges offering continuous futures have been on the rise recently. As a result, total Bitcoin open interest fell by 13.69%, eliminating highly leveraged long position futures, according to Bybt data.
- High social volume
According to the crypto analytics platform Santiment, Bitcoin’s social volume has recently been on the rise, signaling that the retail crowd has finally succumbed to FOMO.
The day before the decline, Bitcoin searches hit a 2020 high after the “quiet” rally began to gain more attention.
5.Whales that send money to exchanges
CryptoQuant CEO Ki Young Ju stated that Bitcoin whales started investing BTC in cryptocurrency exchanges just hours before the decline.
However, he states that long-term in-chain indicators are on the rise.
- Reduced network activity
Recently, CNBC’s “Fast Trader” company pointed out that the growth in the number of Bitcoin addresses was very high.
At this point Santiment points to the decreasing number of daily active addresses (DAA), which is usually a bearish sign.