The cryptocurrency market experienced a major correction on April 23 as the prices of Bitcoin and Ethereum fell by 15% and 20% respectively. Here are the 5 factors which may have led to this fall of BTC and ETH.
According to Bybt, a reliable data analytics platform, the short positions in the Bitcoin market account for around 54%. The availability of these short positions typically means a lot of long positions were liquidated in the past day.
The Decline of Kimchi Premium
Kimchi premium in South Korea declined to hit 0% as the price of Bitcoin and Ethereum fell. The cause of this fall was that the financial commissioner of South Korea said that cryptocurrencies are not financial assets and thus are unprotected by the government.
Whales are Selling
Investopedia suggests that there are around 1000 individuals holding 40% of the bitcoins. As bitcoin hits an all-time high of over $64,000, small to medium-sized Bitcoin whales might have decided to correct the market.
Biden Tax Concerns
As U.S. President Joe Biden plans to raise taxes on wealthy individuals, Dow Jones Industrial Average plunges 400 points (around 1%) in a single trading session on April 22. This might have also affected the crypto market.
Overheated Futures Market
According to Bybt, the data shows that the open interest of ETH’s futures market has surged to hit an all-time high on CME. This means the futures market is getting overcrowded which ultimately resulted in the fall of prices of Bitcoin and Ethereum.