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Bitcoin declined over $350 on Thursday, losing about $300 in less than 30 minutes. Here are three possible reasons behind the bearish move.
Whales at Work Again
Yesterday, Twitter user Whale Alert reported that 7,800 BTC worth about $79 million was transferred from one unknown wallet to another unknown wallet. After about 4 hours, the same amount moved again, bringing the total size of the transfer to 15,600 BTC or about $158 million.
While we don’t know whether those transactions involved crypto exchanges, whales might be interested in dumping Bitcoin gain ahead of the Bakkt launch. The Bitcoin futures trading platform is about to go live on September 23.
Another interesting theory is that whales are trying to stop the altcoin surge by dumping their Bitcoin. Starting from Tuesday, Ripple, Ethereum, Bitcoin Cash, Stellar Lumens, Litecoin, and other coins unexpectedly surged, leaving the king of crypto with its sideways trend. The altcoin agitation might have been triggered by Ripple, whose price was driven by the proposed hard fork or rumors about a connection with Coinbase.
Dozens of altcoins later followed XRP in a hope to jump-start the altcoin season. The chances are that Bitcoin holders do not like such a scenario and that by dumping Bitcoin, whales would scare crypto investors as a whole, including those who bet on altcoins.
Bitcoin is Simply Abiding by TA Rules
Another reason behind BTC price drop is that the largest coin is simply following a technical analysis pattern. More specifically, it couldn’t get over a strong resistance line.
OK, the resistance was obviously stronger.
The question now is whether we will go testing support or not.
IMO, no. At least, not now.$BTC $BTCUSD #bitcoin pic.twitter.com/2xQxnZHdqG— CryptoHamster (@CryptoHamsterIO) September 19, 2019
It seems that Bitcoin has fallen into a bearish descending triangle pattern according to a number of analyses. This type of pattern usually foreshadows a steep decline, but there are some who believe Bitcoin could potentially reverse its fate. Thus, we are about to see more volatility soon, though it’s difficult to know in which direction.
Fed Doesn’t Push for More Easing
Finally, the BTC drop came hours after the Fed announced its rate cut on Wednesday. While any rate cut would support the Bitcoin price, this time was different, as everyone expected the Fed’s latest decision. The problem is that the American central bank didn’t suggest more easing in the future, giving an ambiguous outlook that disappointed many investors and US President Donald Trump. Bitcoin would have found support if the Fed had clearly pointed to more cuts, but it didn’t do so.
Do you think Bitcoin will break the resistance level soon? Share your expectations in the comments section!
Images via Shutterstock, Twitter: @CryptoHamsterIO
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