Several reports claim that the last time Bitcoin's price increased significantly was on August 8, 2023, when it went from $29,180.58 to $29,765.49, a rise of 2%. After reaching a peak of $30,330.64 on July 23, 2023, Bitcoin entered a period of decline. As of this writing, the value of one bitcoin is US$26,000, Bitcoin drops 11% from the previous week. According to crypto analysts, there are a few theories listed below whose abrupt decline has perplexed many in the cryptocurrency industry.
1. According to reports, SpaceX is dumping its Bitcoin holdings- News that Elon Musk's SpaceX had written down its Bitcoin assets, which were then valued at about $20 million, surfaced on August 18, 2023. Some investors may have sold their Bitcoin in response to this revelation out of concern that other significant holders may follow suit.
2. The collapse of Chinese real estate behemoth Evergrande- The Chinese real estate behemoth Evergrande's collapse also contributed to some market turbulence. Evergrande is a significant borrower, and its failure might have repercussions on the entire global financial system. Some investors may have decided to sell their Bitcoin as a safe haven asset as a result of this.
3. Fear of interest rate increases by central banks everywhere- In an effort to battle inflation, central banks throughout the world are anticipated to hike interest rates in the upcoming months. This might result in a drop in the value of stocks and other assets, which would be bad for the cryptocurrency market.
4. A rise in liquidations in the market for cryptocurrency derivatives- When margin calls compel traders to sell their assets, this is known as a liquidation. This may occur when the value of an asset decreases suddenly, and it may have a cascading effect, driving the price even lower.
5. A decrease in trade activity- The market for cryptocurrencies has seen a decrease in trading activity recently. This can indicate that investors are losing faith in the market, and it might also increase market volatility.
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