The sudden drop in the price of Bitcoin, down to $25,166 within minutes, was something crypto investors did not expect. The negative sentiment among investors, already turned towards the downside due to a series of bad news, triggered panic selling. Over $700 million was liquidated in just half an hour. However, the danger is not yet over.
How Low Will Bitcoin Drop?
At the time of writing this article, the price of Bitcoin stands at $26,300. The tested support level of $25,500 is holding for now. To avoid larger losses in the coming hours, it will be necessary to maintain this critical zone. If we see closings below it, sales could continue down to $24,000 and $23,500 levels. Altcoin investors have been the most affected by the ongoing decline. Altcoins, which the SEC has classified as securities, were already struggling to maintain their support levels.
For instance, ADA Coin experienced a drop of over 15% to $0.238 after a long period of stability. XRP Coin, on the other hand, reached the price levels at which the summary decision rally began. Many cryptocurrencies are continuing the day with double-digit losses. Depending on Bitcoin’s future roadmap, we may witness deeper declines.
Increased Bitcoin Volatility
Volatility metrics have been signaling for weeks. The BTC volatility, which had reached the bottom in January 2016 and 2023, rapidly increased in the early minutes of August 18. BTC dropped to $24,715 on the Bitfinex cryptocurrency exchange. While it is unknown exactly what caused the decline, SpaceX sold $373 million worth of BTC, which it had purchased in 2021-2022, and Chinese Evergrande Group filed for bankruptcy in New York, Chapter 11.
The drop brought Bitcoin’s market value below $500 billion for the first time since June 16 and reached unprecedented low levels since June 20. Crypto analyst Will Clemente stated that today’s price movement of Bitcoin is the most volatile move so far in 2023.
Although such a move was expected after excessive shallow volatility, the speed at which it occurred surprised investors. Despite the decline, BTC continues to stay about 60% above its starting price of $16,500 in 2023.
On the other hand, the EI CDD data shared by Barış Kardeş indicates that BTC is still being sent to exchanges, suggesting that the decline could continue.
