The price of Bitcoin, the most widely used cryptocurrency in the world, has experienced a considerable decline over the past day, which has set off a domino effect across all other cryptocurrencies. On the 18th of August, the price of BTC fell unexpectedly by 8% in just a couple of minutes due to increased selling pressure from investors.


Market corrections of this magnitude are not unheard of; Bitcoin has previously experienced numerous falls of this size. Therefore, several factors in the cryptocurrency business and the world economy may be to blame for the recent decline in BTC's value. Here are several hypotheses regarding the elements that could have aggravated the most recent crash.

SpaceX is said to be selling its Bitcoin holdings

Elon Musk's aerospace company SpaceX is said to have liquidated almost all of its Bitcoin holdings. Tesla and SpaceX were two of the few businesses to purchase Bitcoin during the 2021 bull run. In 2021 and 2022, SpaceX reportedly had $373 million in Bitcoin on its bank sheet, but the company has since sold the digital currency.


Although it's unclear exactly when or how SpaceX sold its Bitcoin holdings, the news has pressured investors to deal.

Concerns about the Fed raising interest rates

One of the main markets for Bitcoin is the US, and recent information from the minutes of the Federal Reserve's July meeting suggests that interest rates may rise again. The US Federal Reserve controls interest rates, and when rates are raised, it can significantly affect risky assets like Bitcoin.

Increased borrowing costs and better returns on secure products like bonds are caused by higher interest rates, which may deter traders from taking on hazardous leveraged positions in the cryptocurrency market.

Futures Liquidations and Crypto Whales Sell Significantly

The futures market has experienced a frenzy of liquidations during the last 24 hours, according to data from CoinGlass. The market had the most considerable liquidation of futures this year, with BTC seeing liquidations of $498.88 million.

According to the statistics, most of the bets that were liquidated were long ones, indicating that traders had bet on Bitcoin's price increase. $1.04 billion worth of assets have been liquidated in the last 24 hours, including $308.89 million and $27.56 million from ETH and XRP, respectively.

The increase in the Coinbase premium of +3% suggests that some whales are offloading BTC to Binance. Additionally, when crypto whales sell substantial quantities of BTC, the market may become flooded, and the price may fall even further.

Bankrupt Chinese Property Giant

The second-largest real estate developer in China, China Evergrande, has declared bankruptcy in the US. Since the bankruptcy news broke just as the price of Bitcoin was beginning to plummet, this has had a cascading effect.


Does This Signal More Sustained Bearishness In Bitcoin?

When Bitcoin falls, the rest of the cryptocurrency market frequently follows. As a result, the price of other cryptocurrencies has also dropped due to the current Bitcoin crash. According to data from Coinmarketcap, Bitcoin has decreased by 7.06% during the last 24 hours. ETH, BNB, and XRP, three significant altcoins, are down by 5.77%, 5.19%, and 13.20%, respectively.

The price of Bitcoin has fluctuated a lot in recent months and has been unable to surpass $30,000 this year. Nevertheless, if the SEC approves the most recent applications for Spot Bitcoin ETFs, its price may rise again.