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Why did Bitcoin price drop today?

The price of popular cryptocurrency Bitcoin dropped overnight from almost $53,000 to as low as $43,000 on Monday morning. Currently Bitcoin’s price is at just north of $47,000. With the Bitcoin price drop came the price drop for almost every other cryptocurrency asset on the market.

Here's why the Bitcoin price drop happened today

While a Bitcoin price drop of this magnitude is sure to get the attention of investors, it is unclear what exactly prompted the sell-off.

Here is our theory…

September 2021 brought the fourth and final phase of the SEBI mandated peak margining system. For traders, they must now pay up margins upfront for any position in the stock market. For the brokers, this reduces the risk of open positions since they are now covered by margins for peak risk. For Bitcoin holders, it means that this new regulation required a ton of liquidity and could have been the cause of the big sell off.

As with most sell-offs, they tend to snowball as many crypto-holders liquidate their positions to ride out the mini-bear market.

With the stock market closed for the 3 day Labor Day Weekend in the United States, it is also possible that the sell-off was further exasperated by movement back from the crypto market to Wall Street as markets opened at 9:30 AM.

It remains to be seen how quickly the Bitcoin price will rebound along with the entire crypto market but it appears the selling activity had leveled around the lunch hour on the east coast in the United States.

Categories: BusinessNews