Ethereum
Bitcoin Hits 4-Month Low at $55,366, Ether Down 8%: Why Are Cryptos Falling Today?
Bitcoin has seen a significant decline, hitting a four-month low of $55,366 on Friday. The cryptocurrency suffered its worst weekly performance in a year due to uncertainty over whether Joe Biden will remain the Democratic presidential candidate in the US and concerns about a potential surge in the supply of cryptocurrencies.
Friday, Bitcoin Price ETH prices fell 5% to $55,366, their lowest level since late February, and were down 10% on the week. Ether was also hit, falling 8% to $2,891, marking its lowest level in a month and a half.
Bitcoin started the year strong, buoyed by the launch of exchange-traded funds (ETFs) in the United States, which propelled it to an all-time high of $73,803.25 in mid-March. However, since then, bitcoin has seen a decline of more than 21%.
Investors are also concerned that Biden could be replaced as the Democratic presidential nominee by someone who is less pro-crypto, market participants said, after his poor performance in the first debate against Donald Trump.
Analysts also pointed to reports that Mt. Gox, the world’s leading cryptocurrency exchange before its demise in 2014, is paying off its creditors. This has raised concerns that bitcoin could face further downward pressure if those creditors dump their tokens.
According to CoinSwitch Markets Desk, with three major oversupply (Mt. Gox, US and German governments) currently being dumped into BTC markets, the expected selling pressure has sent prices of the largest crypto asset plummeting to levels seen six months ago, after breaking above $55,000 earlier today, down over 5%. Broader markets have followed suit, with altcoin prices crashing and market-wide liquidations surpassing $300 million in the past 24 hours.
“The latest price drop started with the German government transferring its largest batch ever of 3,000 BTC ($175 million), including over $75 million directly to exchanges. The German government has now sent over $300 million worth of BTC to identified exchange addresses and currently holds 40,359 bitcoins, worth around $2.32 billion. But the real sell-off began in the last few hours after Arkham identified that Mt Gox had moved 47,228 BTC ($2.71 billion) from cold storage to a new wallet, which could suggest the buyback process is about to begin. This sent shockwaves through the broader markets, with altcoins falling 10-20% and the overall cryptocurrency market cap falling to $2.1 trillion,” he added.
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Of note was the sharp decline in Pendle (down 20%), which lost $3 billion of its TVL with the June expiry due to waning hype around airdrop farming and lower yields amid muted crypto activity, CoinSwitch said.