On Wednesday, the cryptocurrency market faced a sharp decline in value as Bitcoin, the largest digital currency by market capitalization, experienced a significant drop in value. Within 15 minutes, Bitcoin had dropped below the $30,000 mark and proceeded to fall, reaching a low of $29,000.
This sharp drop came as a surprise to many investors and also caused a decline in altcoins. Some altcoins witnessed 10% to 15% retracements. Along with this downturn, Ethereum, which had recently exceeded the $2,000 mark and hit $2,150 owing to the Shapella upgrade, saw a huge drop in value. Mining stocks have also fallen.
What is the Reason for This Sharp Drop in Bitcoin?
The reason for this drop is not known literally but according to an allegation, one of the primary factors contributing to this was a massive market sell order executed on Binance, one of the world’s leading cryptocurrency exchanges.
@52kskew, a prominent Crypto Twitter trader, pointed out that a 16,000 bitcoin sell order, worth over $467 million at current prices, preceded the rapid drop, which may have likely started the long squeeze.
For now, this is just an allegation with no actual evidence, but this sell order resulted in the liquidation of millions of dollars worth of futures holdings, exacerbating Bitcoin’s value slide. The market is currently stable, and as a result of the pullback, a 5% recovery can be observed in altcoins.