Overview of Bitcoin’s Recent Decline
The price of Bitcoin has experienced a 5% drop, placing it at $101,397 per unit on this Tuesday.
This decline in the world’s largest cryptocurrency by market capitalization is attributed to the liquidation of assets worth $1.3 trillion that were previously held in Bitcoin over the past 24 hours.
Reasons Behind Bitcoin’s Price Drop
According to CoinGlass, investors who held long positions (betting on Bitcoin’s rise) have withdrawn their resources from the market.
Mixed signals in the markets have not clarified whether the Federal Reserve (Fed) of the United States will lower its reference interest rate.
Impact on Other Cryptocurrencies
Other cryptocurrencies, such as Ethereum, have also seen a 7.7% decrease in their value during this session, with Ethereum currently trading at $3,374.64.
In January of last year, 11 Bitcoin-related Exchange Traded Funds (ETFs) entered Wall Street with assets totaling billions. On this Tuesday, these 11 instruments, including Invesco Galaxy Bitcoin, Franklin Bitcoin, iShare Bitcoin, and others, have fallen approximately 6% in line with Bitcoin’s decline.
Bitcoin Experiences Its First October of Losses Since 2018
Bitcoin, the world’s largest cryptocurrency by market capitalization, has retreated 3.9% in October due to increased global uncertainty and a higher risk aversion.
As per Investing’s data, Bitcoin closed the last day of October at $109,602.80, marking its first decline for the month since 2018 and ending a seven-year streak of gains that had earned October the reputation as “lucky month” for the crypto sector.
Despite October’s setback, Bitcoin has still accumulated around an 18% gain for the year.
Key Questions and Answers
- Q: What caused Bitcoin’s recent price drop? A: The liquidation of assets worth $1.3 trillion previously held in Bitcoin over the past 24 hours led to this decline.
- Q: How have other cryptocurrencies been affected by Bitcoin’s drop? A: Cryptocurrencies like Ethereum have also experienced a decrease, with Ethereum currently trading at $3,374.64.
- Q: What are the mixed signals in the markets referring to? A: These signals pertain to uncertainty about whether the Federal Reserve will lower its reference interest rate.
- Q: How has Bitcoin performed historically in October? A: Historically, Bitcoin had seven consecutive years of gains in October until this year, earning it the nickname “lucky month.”
- Q: What is the current year-to-date performance of Bitcoin? A: Despite October’s decline, Bitcoin has still accumulated around an 18% gain for the year.
