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The main reason behind Bitcoin’s price sudden drop by 10%

Conrail, a relatively small South Korean cryptocurrency exchange posted a tweet that it was hacked. Immediately after this post, bitcoin’s price dropped by about 10% to a low of $6,647.33, its lowest since April 9. This event was preceded by a report on Friday on an ongoing investigation about price manipulation by some cryptocurrency exchanges.

Before Saturday, the price of bitcoin (BTC) seemed to be bottoming out at $7,500, building momentum around the $7,600 region and breaking the $7,700 mark. While prominent investors and experts including Peter Brandt suggested a short-term rally for bitcoin, the coin’s volume failed to pick up, thus blocking the bulls from taking over the market.

The coin formed lower highs and found support around $6,600 to create a descending triangle on its daily chart. Currently, the price is testing the very bottom of this formation after a recent sharp selloff. The 100 SMA is below the longer-term 200 SMA signaling that the path to least resistance is to the downside. The gap is also widening to reflect a strengthening bearish pressure, thus bitcoin’s price may continue with the current trend.

All these may have been caused by an announcement made by Conrail’s public statement through a tweet. Although they did not mention Bitcoin, the coin’s price hit a low of $6,647.33 and coincided with a broader cryptocurrency sell-off. As of writing time, the leading digital coin by market capitalization remains 50% lower for this year.

This development came after government investigators demanded the handing over of comprehensive trading data from bitcoin exchanges to assist a probe into whether manipulation is distorting prices in the cryptocurrency market. These investigations followed the launch of bitcoin features on CME Group Inc.’s exchange that took place six months ago. The CME’s drive their final value from prices at four bitcoin exchanges, and this is where the manipulation might be happening.

Do you think price manipulation is among the main causes of the current bearish markets?

Share your thoughts in the comment section below

coinmag

Having contributed to many leading financial blogs, Ken's love for cryptocurrencies and the blockchain technology has him on high alert on all price developments within the cryptocurrency sphere.

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