Bitcoin, in the wake of Thursday, lost almost $3K, 10% of its value. The plunge touted the sharpest sell out began from the early morning of Thursday. However, it rebounded from below $!7K to slightly above $17K within a few hours. What is so unclear is what led to the sudden loss.
Analysts had diverse opinions as usual. Some agreed it is simply a correction to achieving $20K, while others said it is due to OKEx resumption.
Recall that OKEx, a Chinese based exchange, suspended withdrawal in mid-October. Concurrently, many attributed the Bitcoin bull run to the locked funds on the exchange where people cannot withdraw. Suddenly, after five weeks of closed withdrawals, OKEx resumed and met with customers moving their cryptocurrencies to other exchanges and direct custody. Coincidentally or not, Bitcoin lost over $2K in value at almost the same time.
To substantiate the plunge might not be a mere coincidence, OKEx customers moved around 2,822 Bitcoin in what CrptoQuant called the biggest single block outflow in 6 months. Many believed that the circulation led to a decline in price.
According to Jehan Chu, co-founder and managing partner at Hong Kong-based blockchain investment and trading firm Kinetic “The latest BTC price drop is the first of many tests for new money on whether they have the vision and stomach to truly invest in BTC and the future of digital finance, or if they’ll simply repeat 2018 and wash out of the market,”
Vijay Ayyar, head of business development with crypto exchange Luno in Singapore, who agreed the bitcoin drop is a correction to $20K, said, “Conditions are very massively overbought and bound for a correction, So I don’t think it’s unusual frankly.”
Okereke has a passion for researching blockchain and cryptocurrency. He enjoys creating long form educational content to inform others on the opportunities in this space.