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3 reasons Bitcoin price suddenly plunged 7%, liquidating $100M in longs



The price of Bitcoin (BTC) dropped by 7% in less than two hours, liquidating over $100 million worth of longs on Sep. 3. On BitMEX alone, the sudden drop wiped out nearly $99 million worth of longs.

Three key factors likely caused the Bitcoin price to drop: miner outflows, the strength of the U.S. dollar, and major resistance.

Miner outflows

As reported earlier today, large-scale mining pools are sending higher-than-normal amounts of BTC to exchanges in recent days.

Bitcoin outflows across major mining pools. Source: CryptoQuant

The data indicated that miners were preparing to sell their Bitcoin holdings, which added selling pressure to the markets. Ki Young-Ju, the CEO of CryptoQuant, wrote:

“Miners send a certain amount of BTC to exchanges periodically, so they already have a large amount of BTC in the exchange. Whenever they decided to sell, it seems they move a relatively significant amount of BTCs to other wallets, and some of them are going to exchanges.”

Miners represent one of the two sources of external selling pressure in the Bitcoin market other than exchanges. When miners begin to sell their holdings, it could cause significant pressure on BTC.

U.S. dollar rally

Throughout the last three days, the U.S. dollar has rallied against other reserve currencies. The dollar showed particularly strong momentum against the euro.

As Cointelegraph reported, the European Central Bank (ECB) warned the euro has become too expensive. The ECB’s warning rattled the markets, causing a euro sell-off as investors feared the imposition of restrictions.

As the dollar began to rally from a multi-year support area, both Bitcoin and gold declined sharply.

BTC was at strong resistance

The $12,000 to $12,500 range has acted as a strong area of resistance for Bitcoin since 2018.

The daily price chart of Bitcoin. Source:

The daily price chart of Bitcoin. Source:

The BTC price tested the $12,000 resistance level for the fourth time in a relatively short period. That might have led to a reaction from sellers, contributing to the pullback of Bitcoin.

But the price of Bitcoin dropped to as low as $10,625 across major exchanges. Salsa Tekila, a well-known pseudonymous trader, said it is a major support level at a higher time frame, which suggests that a bounce is likely in the near term.

Where do traders see BTC heading?

In the near term, traders generally foresee a rebound to $11,200. A decline from $11,200 would confirm the level as a strong resistance area while reclaiming it would signal bullish continuation.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said:

“The breakdown occurred and we reached the next level. That was a painful drop for me too, but I’m not going to cry in a corner. Expecting a relief rally towards $11,200 to occur in which alts make a bounce too. However, $11,200 is crucial threshold.”

A cryptocurrency trader Scott Melker said an ideal scenario would be a minor drop followed by a firm recovery. He said:

“My ideal $BTC trade here would be a pause in the drop, an RSI reset on the 4-hour from oversold, another drop showing RSI making a higher low and then an absolute rip on an oversold bull div.”

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Bitcoin outflows from centralized exchanges surge to 100K BTC monthly




Bitcoin outflows from centralized exchanges have surged to their highest level year-to-date, with roughly 40,000 BTC being withdrawn over the past seven days.

According to the Glassnode’s August 2 The Week On-Chain report, Bitcoin outflows have accelerated to a rate exceeding 100,000 BTC per month for just the third time since September 2019. The on-chain analytics provider estimates that just 13.2% of circulating BTC are currently held on exchanges — a new low for 2021.

“This represents a near full retracement of the significant inflow volume observed during the May sell-off,” the report noted.

BTC Exchange Net Position Change – Glassnode

Outflows surged to nearly 150,000 BTC monthly at the end of April 2020 following the violent “Black Thursday” crash that saw crypto prices tumble by more than 50% in less than two days after then-U.S. President Trump announced a travel ban between Europe and the U.S. in March as the coronavirus pandemic intensified. Despite the aggressive crash, Bitcoin had rebounded by 150% by the end of May 2020, driving heavy accumulation.

Outflows again came close to 150,000 BTC monthly in November 2020 as Bitcoin surged to test its then-record price high of $20,000, with BTC rallying into new all-time highs the following month.

Glassnode notes divergent trends between Coinbase and Binance throughout most of 2021, with Coinbase having experienced significant outflows while Binance has been the largest recipient of BTC.

However, Binance’s reserves are now beginning to dwindle, with 37,500 BTC (worth roughly $1.5 billion) exiting the exchange over the past week.

Coinbase balances remained steady in June. While the exchange received 30,000 BTC in mid-July, 31,000 BTC was withdrawn from the platform this past week.

Related: Traders are withdrawing 2,000 BTC from centralized exchanges daily

Looking at the macro sentiment, the on-chain analytics provider referred to its “Liveliness metric” to identify trends in accumulation.

The metric, which measures the ratio of the sum of coin days destroyed and the sum of all coin days ever created, indicates a broad trend of accumulation following May’s immediate sell-off.

“It seems that HODLing and accumulation is the most likely dominant trend in the on-chain market,” the report concluded.

BTC Liveliness chart: Glassnode