What is causing Bitcoin's price to plummet so dramatically?

(NLĐO) - The cryptocurrency market is experiencing significant volatility as many investment funds and asset managers shift to a defensive stance, prioritizing profit preservation.

On the afternoon of November 21st, the cryptocurrency market saw a sharp decline. Data from the OKX exchange shows that in the past 24 hours, the price of Bitcoin has fallen by more than 10%, to $82,790.

The prices of other cryptocurrencies also plummeted significantly, with Ethereum falling by more than 10% to $2,690; XRP dropping by nearly 10% to $1.90; BNB falling by more than 9% to $819; and Solana dropping by more than 11% to $126.

According to CoinTelegraph , the market is experiencing a new wave of selling combined with changes in global interest rate expectations.

The price of Bitcoin has now fallen by more than 20% in a month, a much sharper decline than the stock market, which has remained stable thanks to positive earnings results from major technology companies.

Some market makers believe the decline stems from the sudden transfer of large amounts of Bitcoin that had been dormant for years to exchanges.

Bitcoin is currently trading in the $82,790 range. Source: OKX

This suggests that long-term investors are selling Bitcoin, causing a sharp increase in supply and leading to selling pressure outweighing buying pressure.

In this context, many investment funds and asset managers have shifted to a defensive stance, prioritizing profit preservation, leading to reduced liquidity in the market, especially at key support levels.

In the derivatives market, the negative trend is even more pronounced. Investors are primarily betting on a price decline, while hedging instruments are shifting to lower levels, reflecting concerns that Bitcoin prices will fall even further.

Options trading data shows that the market's "hot spot" of interest has shifted from expectations of rising prices to a scenario of falling close to the $80,000 mark.

Meanwhile, attention is focused on a business holding a large amount of Bitcoin, with its price approaching its average cost of over $74,000.

If the price of Bitcoin continues to fall, the psychological and financial pressure on this company will increase. At the same time, a major US bank has warned that the company's stock is under pressure due to concerns that it may be removed from a major index early next year.

If this happens, billions of dollars in index investments could be withdrawn, making the already fragile cryptocurrency market even more volatile.

Source: https://nld.com.vn/dieu-gi-dang-khien-bitcoin-mat-gia-du-doi-196251121170825273.htm