- Bitcoin price slid 15% between August 16 and 17, breaking its 55-day consolidation.
- This sudden downswing caused billions in liquidations, but volatility continues to tread near all-time lows.
- Investors wonder if BTC will experience more southbound moves as it hovers around the $26,000 level.
Bitcoin price has left holders dumbstruck after a 55-day consolidation streak ended with a bang with a 15% correction that wiped billions in open interest and liquidations. As BTC hovers around $26,000, onlookers are left with two thoughts – “Why did Bitcoin crash?” and “Where will it go next?” This article breaks down these two trains of thought.
Also read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bad timing for BTC slump as market weekend tranquil sets in
Bitcoin price crash and the reason behind it
While there are many theories on why the Bitcoin price crashed, two stand out – coiling volatility and forced liquidations. Just before the 2023 rally formed a top at $31,500, BTC was already trading in a tight range. Coupled with macroeconomic conditions and rangebound movement, the volatility of BTC hit all-time lows.
BTC volatility index
This tight range continued for nearly 55 days when Bitcoin price traded inside a $2,000 range. Over its 13-year lifespan, BTC has embarked on many low-volatile phases, but each time BTC’s range breached, it triggered an explosive move.
Technically, this breakout move, in hindsight, was likely.
The second reason is that this move was due to SpaceX’s alleged reduction in the Bitcoin balance sheet. Although rumors, this is also one reason for the sudden crash in Bitcoin price.
QCP Capital notes in their newsletter that a “large BTC and ETH gamma related perp liquidations on options exchanges Deribit and OKX, which together accounted for an outsized 50% of all liquidation flow.”
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.