Today, the crypto market seems to be looking better compared to the day before, and most of the coins are trading in the green.
At the moment of writing this article, Bitcoin is trading in the green, and the most important coin is priced at $6,295.82.
As you know by now, during the past week, the most important coin in the market dropped in price by more than 50% and the main reason was believed to be back then the coronavirus pandemic.
Another potential reason for BTC’s fall in price
It’s been revealed that we might have another potential reason for which BTC fell a little while ago. Some analysts said that the coronavirus pandemic is behind the fall in price.
Analysts were shocked last week when BTC fell in price under $4,000 per coin and this managed to spark fears of a crypto wipeout.
Forbes believes that the reason is something else.
“The sudden fall was led by Seychelles-based bitcoin and cryptocurrency exchange BitMEX, with the bitcoin price dropping to a low of $3,600 on the exchange before it was closed for maintenance,” Forbes writes.
They continued and explained that the BTC price recovery to back over $5,000 was led by Coinbase with BitMEX lagging far behind the other major exchanges.
“Now, crypto analysts have warned so-called leveraged trades, where investors can open positions much larger than their own capital and are popular on BitMEX, can lead to “extreme corrections.”
Geoff Watts, a senior data scientist at U.S.-based Digital Assets Data has analyzed the last BTC selloff and said that “We’re seeing a lot of leveraged trades in the crypto markets and that leverage can lead to extreme corrections during periods of high volatility.”
Check out Forbes’ complete article in order to learn more.
There are various analysts who believe that Bitcoin will recover just in time for the halving event which is scheduled for May.