Bitcoin Price Plunges 5% – Fake News and Congestion to Blame?
• A flash crash was triggered by fake news about the alleged sale of 9,800 BTC by the U.S. government.
• The congestion of Bitcoin and Ethereum blockchains has caused uncertainty in the crypto market.
• Unconfirmed rumors concerning Binance US and Grayscale have been circulating.
Fake News Triggers Bitcoin Flash Crash
A flash crash was triggered on May 10th when fake news was spread alleging that the U.S. government had sold 9,800 BTC. This caused an immediate deep pullback of Bitcoin’s price to as low as $26,000, which it has yet to recover from.
Uncertainty and Bearish Pattern Fuel Market Dump
The departure of Jump and Jane Street from the U.S. crypto market due to regulatory uncertainty has made liquidity problems worse, leading to higher volatility with larger buy and sell orders moving the market faster. Adding to the downward pressure is a bearish head and shoulders pattern on Bitcoin’s 1-day chart, which could signal a further drop in price even lower than $25,000 if it holds true.
Bitcoin Blockchain Congestion & Grayscale Rumors
The influx of Ordinals and meme coins on Bitcoin’s blockchain are seen by some as a distributed denial-of-service (DDoS) attack that is further clogging up transactions on its network and adding to uncertainty in the market place. There are also unverified rumors that Grayscale may be selling something on Coinbase to cover a loan repayment due next week worth $575 million USD owed to Genesis Trading – although this rumor remains unsubstantiated at this time.
The combination of fake news about an alleged BTC sale by US government, rising congestion on both Bitcoin and Ethereum networks, exiting institutional investors due to regulatory uncertainty, rumors concerning Binance US & Grayscale all add up for a messy environment for traders who must now decide whether there is enough confidence left amidst all this chaos or whether they should adopt a more bearish stance towards their investments during these tumultuous times for crypto markets globally