Bitcoin has plunged, down to $51,000 at one point after falling from $65,000 to $60,000 with it somewhat recovering to $54,500 as of writing.
Making this the biggest crash in bitcoin’s history by sum, but not by percentage, as we have just witnessed the first $10,000 red hourly candle.
The crash began at around 3AM UTC, with some attributing it to some fake news tweet that contains false information:
The above seems to be based on a Treasury Department announcement of sanctions on some Russian hackers due to election interference. It says:
“As part of today’s listing of SES on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), OFAC is also identifying digital currency addresses used by SES to fulfill customer orders in order to help assist financial institutions, and their third-party identity verification services, in identifying customers on their platforms who have purchased fraudulent identity documents.
Known SES digital currency addresses have received over $2.5 million in digital currencies over more than 26,900 transactions from 2013 to March 2021.”
Whether you agree with their actions or not, this is just law enforcement doing their job with it so happening these guys have some bitcoin, instead of only dollars or roubles.
In short, this has pretty much nothing to do with bitcoin itself, but what does is this incident in Xinjiang that has led to the closure of mining farms there.
There’s no suggestion of anything political, as in the government just pretending or excusing so as to close the farms. Therefore this is just another hash fall to join the long list of many such hash falls, including of 40%.
But, the timing is impeccable. Just as Turkey could not find a better timing by banning bitcoin payments while it was touching resistance at $65,000 and eth was at big resistance at $2,500, so too this incident comes when the market was not very sure whether to properly go down or just hold on to $60,000.
So the news itself maybe added to the speed, but in more bullish circumstances, the market could have completely ignored the hash drop because it’s just temporary and doesn’t really change anything fundamentally as the network keeps working exactly as it should.
So our answer for why it dropped would be that it hit resistance at $65,000, so it had to test support, with Xinjiang and Turkey just adding flavour.
The big question now being whether that $52,000 support will actually hold, whether that was the local bottom, with some adding to the mix the months old rumor that India will ban bitcoin. We have seen no developments there, so bears are trying to party.
It’s useful however to not exuberance as some bitcoin traders say, and that goes for both bears and bulls. The rest can just enjoy the show because this is bitcoin, with $10,000 candles now.