The Cause of Yesterday's Bitcoin Crash According to Crypto Academy
2024-08-14
Bittime - On August 12, 2024, the price of Bitcoin (BTC) experienced a decline that surprised many investors and traders around the world.
Many are wondering, what actually caused this crash? Crypto Academy, in its latest video, provides an in-depth analysis of the main causes behind this sudden drop in Bitcoin prices.
Decreasing Liquidity in the Market
One of the main factors mentioned by the Crypto Academy is the decline in liquidity in the crypto market. In recent weeks, Bitcoin trading volume has decreased significantly.
This reduction in liquidity makes the market more susceptible to sharp price fluctuations, especially when there is heavy selling by “whales” or large investors.
Sell-off by Institutional Investors
Crypto Academy also mentioned that one of the main causes of this crash was a massive sell-off by several institutional investors.
Several hedge funds and large investment firms reportedly made large Bitcoin sales to take advantage of the price increases that occurred in previous months.
This selling action triggered a domino effect, which made Bitcoin prices fall further.
Negative Market Sentiment
Another factor that contributed to this decline was negative market sentiment. Several negative news regarding crypto regulations in several countries as well as the potential for a global economic recession have affected investor confidence.
This negative sentiment is compounded by some analysts predicting that Bitcoin may experience a further correction in the near future.
Technical Factors: Overbought and Overleveraged
From a technical point of view, Crypto Academy explains that before the crash occurred, Bitcoin was in an overbought condition.
This means that the price has risen too high too quickly, without sufficient volume support. Additionally, many traders use high leverage in their positions.
When prices start to fall, these leveraged positions are automatically liquidated, further exacerbating the price decline.
Global Market Influence
Not only internal factors, global market conditions also played a role in yesterday's Bitcoin crash.
Economic uncertainty in several large countries, such as the United States and China, as well as increasing geopolitical tensions, have caused investors to be more careful in allocating their assets.
As a result, some investors choose to sell risky assets such as crypto, including Bitcoin.
Announcement of New Regulations
In the midst of negative market sentiment, several countries announced new, stricter regulations on trading and use of crypto assets.
The announcement came as a surprise to the market and triggered a wave of selling, especially among retail investors worried about the long-term impact of the regulations.
Conclusion
The decline in Bitcoin prices that occurred on August 13, 2024 was caused by a combination of various factors, ranging from decreased liquidity, selling actions by institutional investors, to negative market sentiment.
Crypto Academy emphasizes the importance of investors remaining calm and not making decisions based on emotions in situations like this.
Over the long term, the crypto market has demonstrated the ability to recover from major downturns, although short-term price fluctuations are inevitable.
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