Bitcoin nears 2-month low after Fed minutes dial up 

The price of Bitcoin has dropped to a two-month low following a sudden overnight slump.

In the space of an hour late on Thursday night, the price of the cryptocurrency dropped by almost $2000, from $43,170.96 at 9:30pm to $41,287.93 at 10:30pm.

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That drop followed an earlier but less dramatic slump in the afternoon, when the price went down by about $900.

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  • Bitcoin price dipped 10% to record a new multi-month low at $25,166 before a quick pullback above the $26,300 level.
  • The whiplash saw almost $820 million in total liquidations for long positions across the crypto market.
  • This happened on the back of a wide range of macroeconomics, including Evergrande bankruptcy, SpaceX FUD, and Ripple vs. SEC news.

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The price at 10:30pm on Thursday was the lowest Bitcoin had been valued since June 19, when it was in the midst of a huge surge on the back of fund manager BlackRock’s filing for a Bitcoin ETF.

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As of 1pm Friday, Bitcoin had recovered slightly and was sitting at $41,314.69.

It’s not known what exactly caused Thursday night’s sudden tumble.

Some have pointed to the strong yields of government bonds, which are currently sitting at 15-year highs.

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Bitcoin price slump, August 17 2023
Bitcoin price slump, August 17 2023 (Google)

Others have pointed out it could be linked to Elon Musk’s SpaceX.

The slump coincided with a Wall Street Journal report claiming the space exploration company has sold its holdings of the cryptocurrency, worth about $582 million, which it held in 2021 and 2022.

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It’s not known when exactly Space X sold those holdings.

Bitcoin’s price fall triggered similar slumps in other leading cryptocurrencies, including Ethereum and Ripple.

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How do new token launches or listings affect cryptocurrency prices?

Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.

How do hacks affect cryptocurrency prices?

A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.

How do macroeconomic releases and events affect cryptocurrency prices?

Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.

How do major crypto upgrades like halvings, hard forks affect cryptocurrency prices?

Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.

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