Another Bitcoin crash today: why?

Today, another Bitcoin crash occurred. 

In reality, it is merely a return to the values from five days ago, so rather than an actual crash, it was the erasure of the gains from the past four days. 

In fact, last Wednesday the price of BTC fluctuated within a range between $86,000 and $88,000, but at one point it suddenly surged above $91,000.

There it remained until yesterday. 

Today’s Crash

Shortly before the reopening of traditional markets after the weekend, the price of Bitcoin was still above $91,000.

However, a few minutes after the reopening of the oceanic markets, the S&P500 futures began to decline. 

In particular, its decline accelerated about half an hour later, thereby also triggering a drop in the price of Bitcoin to $90,500.

Upon the reopening of Asian markets, there was a renewed acceleration in the decline of the S&P500 futures, which triggered Bitcoin’s drop below $90,300.

This decline, in turn, triggered significant forced liquidations of leveraged long positions, causing the price of Bitcoin to drop below $89,000 within a quarter of an hour.

At that point, in theory, it should have marked a rebound, especially since this is usually what happens after rapid and violent forced liquidations. 

Instead, the S&P500 futures continued to decline for another hour, causing BTC/USD to also keep falling, dropping below $87,000.

The Adjustment

Shortly before the reopening of the Chinese stock markets, a stabilization phase began, but it only lasted about an hour. 

In fact, the S&P500 futures have resumed their decline, and BTC/USD has followed suit. 

At that point, however, the bulk of the decline had occurred, and although the daily low of Bitcoin’s price was reached below $86,000, shortly before the Tokyo stock market closed, there was a slight rebound involving both the S&P500 futures, the Chinese stock markets, and Bitcoin. 

However, while the S&P500 futures halted at -0.8%, then slightly recovered to -0.5%, Bitcoin recorded a -6%, then slightly recovered to -5%.

Interestingly, however, the Chinese stock markets recorded a +0.5%, in stark contrast to the -1.9% of the Tokyo stock market (which has already closed now). 

The Problem

The issue, therefore, focused on the oceanic exchanges and the Japanese one, particularly concerning the S&P500 futures.

It is noteworthy that the price of gold has risen by 0.5%, indicating a certain level of fear among Asian markets towards the S&P500.

After all, for weeks now there has been talk of a potential speculative bubble that has inflated in recent months in the American stock market, so it’s not surprising at all that there’s a bit of fear circulating. 

What stands out, however, is the stark difference in trend between the Japanese stock market and the Chinese ones. 

However, taking a look at the yen reveals a very peculiar situation concerning Japan. 

In fact, after significantly weakening against the dollar until November 20, the yen has started to slightly strengthen over the past ten days. 

It should be noted that Japan would actually benefit from a weak yen to counteract the tariffs imposed by Trump on its exports to the USA, therefore its appreciation is not good news for the economy of the Land of the Rising Sun. 

The Problem with Bitcoin

All this explains why a decline in the price of Bitcoin was triggered, but not the extent of that decline. 

Indeed, when the price of BTC dropped below $89,000 last night due to forced liquidations of leveraged positions, it theoretically should have rebounded. However, not only did it fail to register any real rebound, but it resumed its decline in less than half an hour. 

At this particular moment, it seems that some major Market Makers (MM) are experiencing profitability issues. 

It is possible that the second significant drop in BTC’s price last night, from $89,000 to less than $87,000, was due to substantial whale sell-offs like those by MMs. 

It is not certain that these are dumps by the MM, but it seems very likely that they are whale dumps. 

Fortunately, at a certain point, the decline of the Japanese stock market came to an end, and the slight recovery of the Chinese markets began to make its presence felt. However, this was not nearly enough to offset the losses just described, but only to limit them, preventing a further sharp drop below $86,000. 

Now the situation seems to have calmed down, but it could become lively again with the reopening of the US stock exchanges. It is worth noting, however, that only the oceanic and Japanese markets priced in a sharp drop in the S&P500 index last night, while the Chinese markets first cushioned the blow and then priced in a significantly smaller and not at all concerning decline. 

There is even the possibility that if the US dollar continues to weaken today, as it has been doing for a week, US stock markets might even turn positive.