It was another bad day for the crypto space! The bears continued to strengthen their presence regardless of the dominance shared by the bulls. This was further cherished by the recent drop that slashed the markets notably.
What went wrong suddenly? Why did the Bitcoin price drop? Below are a few possible reasons and a small recap of the events that probably caused this drop.
Two Most Negative News Around This Moment
China’s real estate giant, Evergrande, filed for Chapter 15 bankruptcy in a New York court. The company had previously defaulted on its huge debts in 2021, which has sent massive shockwaves across the global financial markets. This had also impacted the crypto space to a large extent. In the filing, Evergrande seeks to restructure talks underway in Hong Kong, the Cayman Islands, and the British Virgin Islands.
Secondly, Elon Musk-owned Tesla and SpaceX have reportedly sold their BTC holdings, triggering billions of dollars in liquidations. SpaceX has owned nearly $373 million worth of BTC while Tesla holds 30K. According to Tesla’s Q2 2023 report, the company had sold all but $184 million worth of BTC, roughly 75% of its original holdings.
SEC Set to Greenlight ETH Futures ETF
Just a few moments after the crash, another round of news circulated in the crypto space. As per some sources, the SEC is all set to approve the Ethereum futures ETF. This is anticipated to be a positive move within the crypto space, but only after it gets approved. However, the crash had dragged the ETH price relatively low, close to $1570.
The ETH price has been following a descending trend ever since the price faced a rejection from the yearly highs above $2000. However, the rounds of the SEC approving the ETH futures ETF have not relatively impacted the price. Now that the markets continue to remain stuck under the bearish trend, the price continues to maintain a notable descending trend.
Along With Massive Liquidations, Open Interest Nuked to June Levels
The Bitcoin drop triggered huge liquidations worth more than a billion dollars in just a few hours. This caused a huge drop in open interest, which plunged close to June levels. Open interest is the total number of outstanding derivative contracts that have to be settled. A drop in these levels suggests the trades have been closed as the market participants are not optimistic about the price anymore.
Source: Twitter
Collectively, the crypto space is currently under an acute bearish trend which is said to amplify in the next few days. Following this a minor relief may be expected, completely depending on the strength of the bulls.
