Bitcoin falls to 4-month low: Here we decode why
What's the story
Bitcoin, the world's largest cryptocurrency, has hit a four-month low amid heavy liquidations of leveraged positions. The digital asset fell by 5.7% in the US on Saturday and continued its downward trend in Asia today, hitting a low of $62,112, a further decline of 3.6%. This is its weakest performance since July 14. Ether, the second-largest token, also witnessed a similar fate with an 8% drop during the US session and another decline of 3.4% today to $1,711.
Market impact
'New shorts developing in the market'
Rich Rosenblum, co-founder of crypto market maker GSR, attributed the recent downturn to a technical move after Bitcoin broke through its 200-day moving average of about $73,000.
This has led to a wave of liquidations and new shorts developing in the market.
Over the weekend alone, exchanges tracked by Coinglass witnessed nearly $2 billion worth of crypto liquidations, including $774 million in Bitcoin and $488 million in Ether.
Market conditions
Factors contributing to Bitcoin's decline
The recent decline in Bitcoin's value can be attributed to several factors.
These include expectations of higher interest rates, large outflows from US spot Bitcoin exchange-traded funds (ETFs), an AI-fueled risk-off mood, and the continued fallout from a recent $6 billion Binance hack.
From October 30 to November 13, US-listed spot Bitcoin ETFs witnessed nearly $3 billion in net outflows.
Market speculation
Anthropic IPO impacting crypto prices
Richard Galvin, Executive Chairman at crypto investment firm DACM, speculated that the upcoming initial public offering (IPO) of Anthropic could be diverting capital away from cryptocurrencies.
He noted similarities between the current price performance and what happened during the SpaceX IPO pricing period earlier this year.
"It appears crypto remains a short term funding source, particularly for retail investors. This is in addition to all the other macro headwinds," Galvin added.