[Bitcoin staged a “roller coaster”! The whole network more than 110,000 people exploded in 24 hours 2.9 billion yuan evaporated! What is the situation?] In the afternoon of May 24, Beijing time, Bitcoin suddenly staged a “big dive” in the intraday, and currencies such as Ethereum, Binance, and Dogecoin also fell.
Just after the Ethereum spot ETF was approved, the virtual currency market ushered in a wave of selling.
In the afternoon of May 24, Beijing time, Bitcoin suddenly staged a “big dive” in the intraday, and currencies such as Ethereum, Binance, and Dogecoin also fell.
Industry insiders said that bitcoin fell sharply on the 24th, mainly because after the good news of the approval of the Ethereum spot ETF landed, most investors’ optimism faded and they tended to take profits.
Since 15:00 Beijing time on May 24, Bitcoin has successively dropped below the three important thresholds of $70,000, $69,000 and $68,000. According to the China Securities Journal, this means that investors who bought bitcoin after the approval of the Ethereum spot ETF in the early morning of the 24th suffered heavy losses, and the loss of buying one bitcoin was as high as 21,731 yuan.
As of press on May 25, the latest price of Ethereum was $3,727.89, down 1.53% in 24 hours; Bitcoin recouped losses and was last trading at $68,528.5, up 0.81%.
This “roller coaster” trend has left a number of investors wiped out. According to Coinglass data, in the past 24 hours, there were more than 110,000 people in the virtual currency market, with a total amount of $399 million (about 2.9 billion yuan), of which $303 million was a multi-single explosion and $95.65 million was a short single explosion.
It is important to note that this approval does not represent a full approval of the Ethereum ETF. The SEC approved the 19b-4 form for the Ethereum spot ETF, which involves the trading rules, listing standards and fee structure of the product, and then each company still needs to wait for its specific ETF listing plan to be approved, that is, the S-1 form registration statement takes effect, before officially stating that “Ethereum spot ETF is approved for listing.”
On April 20, Beijing time, Bitcoin completed the fourth halving in history, and the mining reward of the Bitcoin network was halved from 6.25 bitcoins to 3.125 bitcoins. The halving event had a big impact on the income of Bitcoin “miners”.
According to research firm Kaiko, the virtual currency market is likely to come under more selling pressure as bitcoin miners, who hold large amounts of virtual currency assets, experience a sharp decline in revenue. “If the miners are forced to sell even a small portion of their assets in the next month, it will have a negative impact on the market.” During the summer months, virtual currency trading activity typically slows down and liquidity is scarce.”
According to Kaiko data, the two largest publicly traded bitcoin mining companies, Marathon Digital and Riot Platforms, hold 17,631 and 8,872 bitcoins worth more than $1.1 billion and more than $500 million, respectively.
According to the Economic Daily previously reported that since the advent of Bitcoin, the price has fluctuated all the way, skyrocketing and plunging is almost the norm, and the multiple risks facing the market cannot be ignored. “Risk is an inherent property of financial activities, and the crypto industry is no exception. The cryptocurrency market faces potential negative factors such as increased macroeconomic uncertainty, the persistence of ‘black swans’ in the industry, and unclear regulatory policies.” Zhao Wei, senior researcher at OKX Research Institute, a digital asset trading platform, said.
According to the China Securities Journal, industry insiders pointed out that market indicators show that bitcoin is currently in a consolidation stage. Key indicators such as exchange inflows, momentum, and the market capitalization to market realization ratio (MVRV) of short-term holders are showing signs of slowing market momentum and increasing selling pressure. In addition, the movement of “miner” income and the cooling of SOPR momentum (expenditure output margin) further suggest that the demand for high-priced Bitcoin is decreasing. In addition, one of the main reasons for today’s price correction may be the decline in Bitcoin’s dominance, indicating that the attention of market participants has clearly shifted away from Bitcoin.
Zhao Wei, a senior researcher at OKX Research Institute, told China Securities Journal that the causes of price fluctuations of Bitcoin and Ethereum are complex and are jointly affected by a variety of factors such as macroeconomic, global regulatory policies, market sentiment, inflows of funds and internal technological development, and are not determined by a single factor. In particular, with the frequent occurrence of various favorable policies and industries, the short-term market has overheated, and the leverage ratio has increased greatly, resulting in a significant increase in risk appetite of some investors.
According to Beijing Business Daily, Yu Jianing, co-chairman of the blockchain Committee of the China Communications Industry Association, pointed out that bitcoin as a highly volatile asset, the price of Bitcoin may experience sharp fluctuations in the short term, which largely depends on market sentiment, macroeconomic environment, regulatory policies and other factors.
Yu also cautioned that the volatility of Bitcoin’s price is part of its nature, and any investment decision should be based on sufficient market research and personal risk tolerance. Understanding Bitcoin’s place in digital assets, as well as the deeper logic of the relationship between digital assets and the digital economy, has important implications for both investment decisions and market analysis.
