Why is Bitcoin Down Today?
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Bitcoin witnessed a fall of around 11% in the last 3 days. Market is filled with fear as to why BTC suddenly started a downwards movement when it was on a good rise earlier. The market fell down to a lowest point of $ 57,800 today. Let’s try to find the real reasons behind this fall.
Russia-Ukraine war
The ongoing war between Russia and Ukraine is one of the major reasons for this fall. History shows that whenever there is a big war in the world, the risky assets markets are the ones to shake. Wars create panic of market fall and this causes the retails seller to sell off their assets in order to prevent losses. In the case of crypto, we are very well aware that it creates a long panic sentiment which drags the market further down. After the Ukraine drone attack on Russian oil facilities, there are chances of this war escalating.
ETF Outflows
Since August 6th, the Bitcoin ETF has seen the highest net outflow of $127.10 million. Even though all other BTC ETFs are receiving a good amount of inflows, Grayscale Bitcoin Trust ETF (GBTC) has recorded a new out-flow of 1469.04 Bitcoin. It now holds 22,770 Bitcoins and has seen an outflow of around 10 BTC, the last day.
Fearful Speculations
The market has filled with bearish sentiments as short term holders panic sell. Last week BTC touched $65,000 however no it is now trading at $59,005. This price pressure has risen from the short term holders who recently saw losses of around 17% due to market correction. As price returned to breakeven, many of these investors chose to sell, building resistance and it added to the downward force.
Looking Ahead
The market is filled with fear because of various market and non market elements. The fear and greed index recorded 30 points while yesterday it was at 48. This clearly shows the sign of bearish sentiments. Long positions got liquidated which added to market fear. If the war between Ukraine and Russia continues there is a chance of the market going further down.
