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23 July 2021
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Bitcoin plummets R $ 50,000 in two hours; understand the reasons

After hitting R $ 320,000 over the weekend, bitcoin fell 17% and lost R $ 50,000 in less than two hours on Monday morning (22), according to the Bitcoin Price Index. In dollar terms, the cryptocurrency went from US $ 58 thousand to US $ 47.7 thousand, the biggest single-day nominal drop that BTC has ever seen.

Bitcoin Portal analyst and columnist Marcel Pechman said one of the factors that may have pushed the price down is the amount of retail investors leveraged in buying BTC futures contracts.

“It is impossible to know exactly what happened, but the fact is that there was a lot of retail leveraged in the purchase of futures contracts, and a drop of 4% already settles all 25x contracts. Then there is the ripple effect, which culminated in some exchanges ‘out of thin air’ when BTC fell below US $ 51 thousand ”, he said.

In addition, according to Pechman, there were withdrawals of $ 1 billion at the Coinbase brokerage over the weekend, which may also have influenced the market:

“Given that the high was all over that period, this indicates that large customers who bought from the exchange probably cashed out for their cold wallet. And given that the flow is traditionally weaker at the weekend, when the other customers returned to activity on Monday, they decided to sell ”.

Short-term fluctuation is common

For Alter CEO, Vinicius Frias, it is normal for sudden fluctuations to occur in the short term in the cryptocurrency market.

“The asset has risen a lot since the end of the year and it is natural for investors to make gains. The important thing is to look at the fundamentals and monitor the new price level – if the asset will remain above US $ 50 thousand ”, he said.

Igor Rodrigues, head of OTC in the Bitcoin Market, also said that a correction was expected for the asset, “given the recent high that has occurred with great intensity”.

João Paulo Mayall, COO at QR Capital, said that ‘intraday’ volatility is normal in assets and that is why it is interesting to wait for the daily price to close today, even to see if the drop will really be $ 10,000.

“The relevant fact behind the decline, as some on-chain analysis shows, is a large flow of bitcoins to major exchanges, such as Gemini.”

After losing R $ 50 thousand in two hours on Monday morning, bitcoin recovered part of the value and, in the early afternoon, it was again traded above R $ 300 thousand in the

main Brazilian exchanges. In dollars, the currency is quoted at $ 53,000, according to CoinMarketCap.

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