Three Reasons Why Bitcoin Dropped Below $51,000 Last Night

Key Takeaways

  • Bitcoin crashed to lows below $51,000 late Saturday due to forced liquidations of long orders.
  • A string of bad news triggered the sell-off, however, only one of them was verifiably true.
  • While many indicators point to a “buy the dip” action, the volatility may persist this week.

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Bitcoin and the broader crypto market saw one of the most gruesome crashes, leading to $9 billion in liquidations. There were three key sources of the negative catalysts. 

Money Laundering Report Clips Bitcoin

The price of Bitcoin plunged to lows of $50,900 on Binance while Coinbase recorded $51,300 at 11:35 pm ET time on Saturday. 

A drop of 12.3% occurred within 20 minutes, starting at 11:15 pm. Apparently, it was triggered by a tweet sent almost an hour ago that claimed the U.S. Treasury was investigating financial institutions for illicit use of crypto. 

Prominent crypto lawyer Jake Chervinsky raised skepticism on the credibility of the news. He stated that the “treasury doesn’t charge money laundering (DOJ does).” Moreover, there are no other reports of the claims. 

While the unverified source was the last tipping point, bearish pressure had been building in the market all day. 

Bitcoin mining hashrate dropped by 40% a week after an accident in a Chinese coal mine halted operations in the entire Xinjiang region. The drastic change raised concerns around Chinese dominance over the market, with one region affecting nearly half of the total hashrate.

Last but not least, rumors of a sell-off of COIN shares by Coinbase executives yesterday had also weakened the market’s spirits, which was ironically heightened last week for the same reason. 

Pseudonymous Twitter account Crypto Randy posted yesterday that the chief product officer and…

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