WHY $BTC and whole market dumped ?
The recent downturn in Bitcoin (BTC) and the broader cryptocurrency market can be attributed to several interrelated factors:
1. Political Tensions Impacting Market Sentiment
A public dispute between Elon Musk and former U.S. President Donald Trump has unsettled investors. Musk accused Trump of associations with Jeffrey Epstein, while Trump threatened to terminate Musk's government contracts. This high-profile clash has introduced political uncertainty, negatively affecting market confidence.
2. Significant Liquidations and Whale Activity
The market experienced nearly $1 billion in crypto liquidations, with Bitcoin alone accounting for approximately $964 million. This was exacerbated by large holders ("whales") offloading substantial positions, intensifying the downward pressure on prices.
3. Profit-Taking After Recent Highs
Bitcoin recently approached an all-time high of $112,000. This surge prompted many investors to realize profits, leading to increased selling pressure. Such profit-taking is a common occurrence after significant price appreciations.
4. Market Consolidation and Decreased Retail Demand
The cryptocurrency market is undergoing a consolidation phase, characterized by reduced retail investor participation. This decline in buying activity has weakened the bullish momentum, contributing to the price drop.
5. Increased Short Positions and Bearish Sentiment
A rise in traders opening short positions has added downward pressure on the market. This bearish sentiment is further reflected in the Fear & Greed Index, which currently stands at 46, indicating a neutral to slightly fearful market mood.
As of now, Bitcoin is trading around $102,420, marking a 2.45% decrease from the previous close. The day's trading has seen a high of $105,888 and a low of $100,781. The overall market capitalization has declined by approximately 3% to $3.2 trillion.
