Bitcoin and the aggregated crypto markets are currently plunging as the selling pressure that they first incurred this past weekend continues to perpetuate, and analysts are now noting that it is highly probable that BTC heads towards the sub-$9,000 price region in the near-future.
Importantly analysts are noting that this sell-off may have been sparked by the CFTC’s investigation into popular crypto trading platform BitMEX, which has created a “liquidity chop,” according to one economist.
Bitcoin Reels Down Towards $9,600
At the time of writing, Bitcoin is trading down nearly 4% at its current price of $9,620, which is down significantly from its daily highs of $10,200.
This move marks an extension of the selling pressure that first began this past Saturday when BTC rapidly surged to just over $11,000 before incurring a massive influx of selling pressure that has since perpetuated, leading the cryptocurrency down to its current prices.
Earlier today, Bitcoin did try to post a minor recovery as it moved up towards $10,000, which was once again met with strong resistance that sent it plummeting lower.
Josh Rager, a popular cryptocurrency analyst on Twitter, spoke about this move down in a recent tweet, explaining that the latest movement could open the gates to a sub-$9,000 move.
“$BTC… we saw this coming. Lack of volume and an established downtrend. This current 4hr candle is already half the size of the previous 4 hr hour candle within its first 20 minutes. Likely sign for continuation down towards the sub $9k target,” he said.
Could the CFTC’s BitMEX Probe be Behind This Drop?
Earlier this week, the world was surprised to find that the U.S. CFTC was launching a probe into popular cryptocurrency trading platform BitMEX, which is accused of intentionally allowing US-based users to flout the restriction on using the leveraged trading service.
Alex Krüger, a popular economist who focuses primarily on cryptocurrencies, spoke about this in a recent tweet, noting that the probe could be one factor behind the downwards pressure.
“This is how low liquidity chop with a downwards skew looks like. Likely related to the US administration comments on bitcoin and the CFTC Bitmex investigation. Volumes have dropped by over 40% since last Thursday. For moments $BTC moving 1-2 ticks /minute, during peak time,” he explained.
As Bitcoin continues to plunge towards the lower-$9,000 region, whether or not it is able to find support here could set the tone for how the crypto will trend in the weeks and months ahead.