The recent decline in cryptocurrency prices, including Bitcoin, is primarily due to a combination of several factors. These include massive whale selling that triggered a flash crash, a technical breakdown signaling a bearish shift, forced liquidations of overleveraged positions, fragility in the market structure with thin order books, and seasonal headwinds as September historically tends to be a weak month for Bitcoin performance. Specifically, a large whale sale of over 24,000 bitcoins (worth about $2.4 billion) pushed prices down sharply, compounded by technical indicators falling below key moving averages. Additionally, over $900 million in liquidations across crypto positions occurred, primarily long bets that were squeezed out. This market fragility is intensified by liquidity challenges and ETF outflows. Historically, September tends to show negative performance for Bitcoin with average losses around 3.77% during bull markets, adding seasonal pressure to the current downturn.
Other contributing factors include a broader market risk-off sentiment affecting tech and high-risk assets, leading to selloffs in crypto-related stocks and exchanges, and the expiration of large Bitcoin and Ethereum options worth over $15 billion, which can increase volatility.
