Market Analysis

Bitcoin Market Drop Today, Explained – $4 Bln BTC Liquidated – Reasons?

The price of the leading cryptocurrency, Bitcoin [BTC] dropped to three-week lows earlier today on Sunday, puncturing the frenzied speculative bubble built into several alternative crypto assets [altcoins] within the wake of Coinbase’s recent debut on Nasdaq.

The biggest cryptocurrency by market price dropped from roughly $60k to around $52.5k USD within a few minutes of the Asian session, liquidating almost $4 Bln worth of positions within the derivatives market, consistent with Messari’s Ryan Watkins.

While the precise reason for the sudden crash is not clear, the market mood may have soured due to rumors that the United States Treasury is getting to charge several financial institutions for money laundering using cryptocurrencies. However, it has been not yet independently verified regarding any pending government action.

Additionally, CNBC last night tweeted a month-old report on India preparing to possibly ban cryptocurrencies within the country. That month-old report was supported by a Reuters story citing an anonymous government official.

Several news services treated the CNBC report as new, possibly contributing to the selloff as fears that the partial cryptocurrency ban in Turkey outlined earlier this week might also be spreading. A message to a CNBC editor has yet to be responded to.

At the reporting time, Bitcoin [BTC, -9.30%] is presently trading at a price near to $55k, representing a 12% drop on a 24-hour basis, while Ethereum [ETH, -9.16%], the second-largest coin is also down almost 13%.

Other altcoins like Ripple [XRP, -17.61%], Polkadot [DOT, -16.37%], Litecoin [LTC, -15.31%], Bitcoin Cash [BCH, -13.01%] have also lost 17% to 20% within the past 24 hours, while Dogecoin [DOGE, +10.07%] is nursing a 6% loss, as per CoinMarketCap.

Payments-focused Ripple and meme cryptocurrency dogecoin recently saw huge retail-led price rallies as Coinbase’s hotly-anticipated listing on Nasdaq on 14th April created general hype around the sector.

Bitcoin rallied above $60k within the days leading up to Coinbase’s listing and clocked a record high of $64,801 USD earlier on 14th this month.

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