The selloff, according to data, was primarily driven by spot markets, specifically the popular cryptocurrency exchange Coinbase.
Coinbase Users Lead Sunday Bitcoin Bloodbath Ahead of Weekly Close
Starting in the early hours of Sunday night, users of the San Francisco based crypto giant Coinbase kicked off a market-wide selloff last night.
According to data from Coinmetrics, smaller selling of BTC started overnight, but a massive 75+ BTC sell order caused a cascade of sell orders to hit and the price of Bitcoin to dump to local of $8,650.
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Bitcoin failed once again to reclaim $10,000 and fell back to support that held two weeks prior. If the support fails to hold a second time, the leading crypto asset by market cap is in danger of a deeper drop and fall back into a downtrend.
Low liquidity around holidays and weekends lead to larger moves in the cryptocurrency market. The US Memorial Day holiday was thought to benefit Bitcoin as other markets are closed on the holiday.
Tonight’s selling brought to you by a massive dump in the spot markets on @coinbase pic.twitter.com/2jHVptD4iA
— Jon Geenty (@geenty) May 25, 2020
Retail Crypto FOMO Is a No-Go
Retail buyers, which Coinbase acts as one of the most popular fiat onramps for, have been largely behind the recent rally from lows.
Stimulus checks and low prices may have helped propel Bitcoin price higher, but a lower low on higher timeframes could spell disaster for the first-ever cryptocurrency if it cannot breach above $10,500.
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$10,000 has long been heralded as the key “FOMO trigger” level that would reignite retail interest and restart a bull market. But Bitcoin continues to struggle to break above the resistance level.
Another attempt at highs is not out of the cards, but a fall lower could soon turn extremely dangerous.
The initial drop may be fueled by spot exchanges, but it could be driven by miners next. This latest fall has brought the price of Bitcoin even lower below the cost of producing each BTC.
According to the Hash Ribbons, Bitcoin miners are only just beginning to capitulate. If this picks up in severity, the abundance of weak miners selling off their holdings to cash out and close up shop could result in steep downside.
Bitcoin price continues its downtrend, and not even the halving, an economic crisis, and hyperinflation have pushed the asset into a new bull trend. What actually sparks the next bull market remains to be seen, but it could begin with a clean break of $10,000 that holds for more than a mere matter of days.