The Real Reason Bitcoin Price Dipped Below $56K

We’re just a few days into September, and the month has already brought a big surprise, even though it was one nobody wanted. The king of all cryptocurrencies, Bitcoin (BTC), has fallen to its lowest level since early August. The mighty really do fall sometimes. 

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In the early Asian morning hours on Wednesday, Bitcoin’s price took a tumble right after the equity markets in both the U.S. and Asia saw some major stocks fall by almost 10%. Bitcoin (BTC) fell to $55,500, its lowest since August 8. The fall wiped out nearly all of Bitcoin’s gains in the past month. 

This fall has shocked many analysts, who continue to wonder what caused Bitcoin’s fall. The most apparent reason for Bitcoin’s dip seems to be the failure of many other assets, including stocks and other tokens.

According to data provided by CoinDesk 20 (CD20), which tracks the largest tokens by market cap, the broader token market fell by 6%. Even other major tokens like Solana’s SOL and Ether (ETH), the native token of Ethereum, saw drops of over 7%. 

Within the same period, U.S stocks also had a difficult time. Tech giant Nvidia saw a massive 600 dip in the Dow Jones Industrial Average. Other U.S stocks tracked by Nasdaq and S&P 500 fell by up to 3.5% in what’s looking like a very bearish September.

Asian markets were also affected. Japan’s Nikkei fell more than 4%, sliding 1,000 points from its last close. However, poor asset performance was not the only trigger for Bitcoin’s fall. 

Massive asset liquidations also played a big part in Bitcoin’s unfortunate September. Bitcoin experienced a similar drop last Tuesday, and unfortunately, one of the fallouts of that episode was a one-hour surge of up to $95 million in liquidations. 

Most of that sell-off surge involved surprisingly large long positions worth $91 million. That liquidation spurt added to over $169 million in long positions that surfaced in the prior 24 hours, according to data provided by CoinGlass.

One more significant event contributing to Bitcoin’s most recent downfall is the surprising bleeding of Bitcoin ETFs. According to data from Farside, the 11 registered Bitcoin ETFs registered a net outflow of $287.8 million. This is the largest single-day tally since May 1, when the funds bled by more than $500 million.

Another thing to consider in this tragic Bitcoin story is the FBI's Public Service Announcement, which warned that North Korean hackers are attempting to steal Bitcoin and crypto funds from the ETFs. While the direct impact of this threat on the recent dip is still unclear, this warning has likely contributed to the increasing sell-off of Bitcoin."

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Bitcoin’s unexpected dip is very reminiscent of the popular saying, “The bigger they are, the harder they fall.” But falls are not new to Bitcoin; it has fallen many times and risen back up, so we don’t expect this time to be any different.

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