The price of Bitcoin has plunged this afternoon, going from about $11,400 earlier in the day to a $10,600 low before it started recovering as buyers stepped in.
According to CryptoCompare data, the flagship cryptocurrency’s price dropped by over $400 in little over 20 minutes, going from over $11,2000 to $10,800 before the sell-off continued. At press time, BTC is at $10,750 and is down over 5% for the day.
Bitcoin’s price notably dropped after cryptocurrency exchanges witnessed an inflow of 92,000 BTC on Wednesday, the biggest single-day rise seen in 37 days, according to blockchain intelligence firm Chainalysis.
Philip Gradwell, chief economist at Chainalysis, revealed on social media traders were rushing to sell as close to $12,000 as they could, adding to the selling pressure BTC was enduring. He pointed out, however, the market had not fully absorbed the 92,000 BTC.
The firm’s data implies the market did not absorb the 92,000 BTC right away because the median trade intensity, which measures the number of times an inflowing coin is traded, remained below the 180-day average at 3.113. There were not enough buyers to match the sellers.
Chainalysis’ data further shows that the amount of BTC being held on cryptocurrency exchanges increased by 12,000. The price of BTC has also dropped at a time in which the U.S. dollar has started gaining strength, and the U.S. stock market’s flagship index, the S&P 500, dropped by 2.72%.
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