At the time of the FED’s announcement, the American Federal Reserve, not to raise interest rates, bitcoin reached $27.5000. On the other hand, the reaction of miners to get rid bitcoin en masse slowed the upward trend. Even though bitcoin seemed to be heading towards the end of the tunnel, this liquidation massive number of miners slowed its exit from the zone of turbulence.
Miners took advantage of this advantage towards an upward trend in bitcoin after the FED announcement to make maximum profits. Facing the drop in price bitcoin below $27,000, investors decided to adopt a new purchasing and sales strategy. Bitcoin which touched the $27,500 mark after the announcement of the FED decision for the first time in September, all transaction data quickly revealed that miners took advantage of this opportunity to sell bitcoin en masse. In less than 72 hours minors have put on the market more than 3400 BTC equivalent to more than 93 million dollars.
Another point which explains this downward trend in the price of bitcoin is the massive purchasing behavior of bitcoin by miners since the beginning of the month this September, which caused the price to rise and as soon as the price reached the bar of $27,000, the opposite reaction occurred. The miners saw the opportunity to make maximum profits and sold BTC en masse. This decision to massive liquidation of BTC caused the price to fall to $26,500 since Friday last. The deduction to be made therefore is that the upward trend has been undermined by crypto miners. And this is the most normal rule in the markets.
Investor reaction is immediate after this wave of liquidation mass of minors. This is speculative “short selling” behavior that dominate the market. Speculative investors pay commissions to their brokers to keep their long position on Bitcoin. Long position on the stock market is simply a long position in the stock. To better understand what is happening with the price of bitcoin, let’s try to understand the terms used in the stock market. What does short or “short selling” mean? It’s about a useful technique for profiting from the fall in a share price. It is also a way to protect your long position that means we said it position buyer. What does this “short selling” or shorting technique consist of?
An investor borrows a security worth 50 Euros from his broker. He resells on the stock market at the same price while also betting on the fall in its price. The price therefore drops and he buys it back at 45 euros. He closes his sell position and pockets 5 euros profit. He then gives the title back to the broker and he also pays his commission.
The situation of bitcoin therefore since Friday shows a drop in the rate of funding. This drop in the BTC funding rate is a sign that investors who bet on the fall in the price of bitcoin pay commissions to the holders of long positions (buyers) by borrowing from them the BTC they resell, then immediately buy back and finally return to their holders. That said, “short sellers” make money by pushing at the same time the price towards a decline. This is what has been happening since Friday for bitcoin. If the trend continues, bitcoin could record further losses more considerable in the coming days.
The behavior of minors is also crucial. We know well that minors economically weak tend to sell their BTC. It is therefore clear that these These risks capitulating quickly and opening the way for the decline of bitcoin. Even if the displayed trend remains optimistic in the cryptocurrency market, capitulation miners and the wave of liquidation in the derivatives markets risk to cause the price of bitcoin to fall below $26,000. At the moment when we let’s put this article online, the price of bitcoin still holds its value at $26,228.20. Several investors bought a lot of BTC at $26,166. If they decide to keep the price of BTC can climb too. The Ethereum price is at rise after this month’s FED event.
