Chair

Bitcoin

Gary

Read

Bitcoin (BTC) has experienced a significant drop, falling below the $68,000 mark, a stark contrast to its earlier price of around $70,000. This decline in <a href="https://coingape.com/bitcoin-whales-accumulate-20k-btc-fueling-70k-btc-rally/" rel="noopener noreferrer nofollow">Bitcoin’s</a> value can be attributed to several key factors that have influenced the broader cryptocurrency market.
<img decoding="async" class="aligncenter wp-image-198431" src="https://coingape.com/wp-content/uploads/2024/05/screenshoteasy-2024-05-23T194056.197.png" alt="" width="771" height="355" srcset="https://coingape.com/wp-content/uploads/2024/05/screenshoteasy-2024-05-23T194056.197.png 979w, https://coingape.com/wp-content/uploads/2024/05/screenshoteasy-2024-05-23T194056.197-300x138.png 300w, https://coingape.com/wp-content/uploads/2024/05/screenshoteasy-2024-05-23T194056.197-768x354.png 768w, https://coingape.com/wp-content/uploads/2024/05/screenshoteasy-2024-05-23T194056.197-150x69.png 150w" sizes="(max-width: 771px) 100vw, 771px">
Source: CoinMarketCap
<h2 id="factors-influencing-bitcoin-s-price-drop">Factors Influencing Bitcoin’s Price Drop</h2>
Today’s pullback in the <a href="https://coingape.com/bitcoin-price-to-hit-250k-ahead-says-londons-crossbridge-capital-md/" rel="noopener noreferrer nofollow">Bitcoin price</a> can primarily be attributed to the S&amp;P Global Purchasing Managers’ Index (PMI) report suggesting a hot US economy. This has led to a surge in the dollar which has in turn put pressure on risk assets such as cryptocurrencies. 
In the PMI report, the economy was reported to be growing at its fastest pace in two years, which caused traders to shift their expectation of interest rate cuts, thus exerting more pressure on Bitcoin and other digital currencies.
At the same time, there is expectation about the decision of the U. S. Securities and Exchange Commission (SEC) on spot ether (ETH) exchange-traded funds (ETFs). This could be due to the fact that market participants are on the lookout for decisions that may affect the market significantly. Crypto analyst Kaleo said that the market reaction could be drastic depending on the decision that has been made. He said 
<blockquote>
 “If the ETH ETF could be denied today, I wouldn’t be surprised to see prices nuke as violently as they ripped the other day.”
</blockquote>
<h2 id="crypto-market-sentiment-and-regulatory-landscape">Crypto Market Sentiment and Regulatory Landscape</h2>
The cryptocurrency market is also influenced by regulatory news and general market sentiment. The SEC has been fairly conservative in its response to the crypto bill that has recently been approved by the House of Representatives. 
SEC Chair<a href="https://coingape.com/just-in-gary-gensler-praises-us-secs-achievements-in-court-on-crypto-cases/" rel="noopener noreferrer nofollow"> Gary Gensler</a> pointed out that the agency is ready for dialogue but will continue to enforce the law to ensure that token operators provide disclosures which are helpful to investors and legally required.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 ETH’s brief and sudden dip below $3800 was likely driven by MEV trading firm Symbolic Capital Partners. The institution sold 6,968 ETH in one minute, worth $27.38 million, with an average selling price of $3,930, according to <a href="https://twitter.com/ai_9684xtpa?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@ai_9684xtpa</a>. One of the transactions sold 3,497 ETH…
 — Wu Blockchain (@WuBlockchain) <a href="https://twitter.com/WuBlockchain/status/1793645325833683166?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 23, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Apart from the regulatory issues, other factors that have been seen to have led to the drop include large selling orders in the market. For instance, trading firm Symbolic Capital Partner sold 6,968 ETH worth $27 million in a single minute, which has led to increased selling pressure in the market.
<h2 id="eth-price-performance-and-market-speculation">ETH Price Performance and Market Speculation</h2>
The anticipation surrounding the SEC’s decision is also seen in the context of the “buy the rumor, sell the news” phenomenon observed in financial markets. This behavior, where prices increase in anticipation of an event and drop after the event occurs, is prevalent in the crypto market. 
Concurrently, this week, the Ethereum market has been quite high volatile, and ETH prices increased more than 22% in expectation of an ETF approval. This was marked by a short squeeze and intense buying which was instrumental in causing large price swings in the market.
<img decoding="async" class="aligncenter" src="https://pbs.twimg.com/media/GORgTkCW4AAP0b3?format=jpg&amp;name=small" alt="Image" width="683" height="329">
Source: CryptoQuant
CryptoQuant also reports that the <a href="https://coingape.com/ethereum-etf-why-is-grayscale-dropping-eth-futures-application/" rel="noopener noreferrer nofollow">ETH futures</a> market has been quite active with total open interest reaching 3.2 million ETH- valued at $11 billion, the highest since January 2023. This rise is mainly due to the strong buy orders that push the price up which led to one of the biggest hourly liquidations of the year with 9.3K ETH.
Further, the ETH-BTC Open Interest ratio has also risen from 0.54 to 0.67 suggesting more investors are leaning towards Ethereum than Bitcoin. Moreover, the discount on the ETHE fund has further reduced to 17%, its lowest in two months, pointing to increased interest in Ethereum compared to Bitcoin among investors.
Read Also: <a href="https://coingape.com/markets/xrp-price-prediction-monumental-bull-run-likely-as-coinbase-initiates-xrp-trading-in-new-york/#:~:text=XRP%20Price%20Prediction%20As%20Pennant%20Pattern%20Forms&amp;text=The%2020%2Dday%20Exponential%20Moving,the%20continuation%20of%20the%20uptrend." rel="noopener noreferrer nofollow">XRP Price Prediction: Monumental Bull Run Likely As Coinbase Initiates XRP Trading In New York</a>
The post <a href="https://coingape.com/why-bitcoin-price-is-falling-sharply-today/" rel="noopener noreferrer nofollow">Why Bitcoin Price Is Falling Sharply Today?</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.

Why Bitcoin Price Is Falling Sharply Today?

Table of Contents

Coingape News Media

Other articles published on May 23, 2024

Pendle, KangaMoon and Injective Are Leading the Market, What Is the All Hype About?

Is Axie Infinity (AXS) About To Skyrocket? Crypto Analysts Spot Major Breakout Patterns

Nvidia Hits $2.5 Trillion Market Cap After AI-Driven Q1

Bitgert Coin: Your $100 Ticket to a Million Dollar Future

Whale Transfers $52M in RNDR Tokens Amidst Market Corrections

Bitcoin Mining Difficulty Increases Due to Higher Hash Rate

Join our free newsletter for daily crypto updates!