What exactly caused Bitcoin to drop 7%?

Bitcoin prices fell about 7% in just one hour on April 26, from $29,850 to $27,789. Blockchain analysis firm Arkham Intelligence falsely warned of wallets linked to Mt. Gox and the U.S. government started moving large amounts of Bitcoin.

Originally, Arkham was tweet Falsely claiming this was caused by a “fix” that sent false alerts to a “small subset of users” on its analytics platform. Popular cryptocurrency news alert account DB, aka Tier10k, was later warned. tweet again:

“Mt Gox Wallet and US Government Transactions: Alert from Arkham”.

However, an hour later, Arkham posted a follow-up tweet stating that they “investigated the DB alert situation and determined that Arkham sent the correct alert in this case.”


source: Arkham

Arkham, on the other hand, emphasized that neither the warning nor the tweet would cause the price of Bitcoin to plummet. Specifically, the drop occurred between 02:17 and 03:01 (Vietnam time), followed by follow-up warnings and tweets at 03:07 and 03:08 (Vietnam hour).

Additionally, according to data posted by Twitter user IT Tech, no transfers were made to wallets associated with Mt. Gox, at the time of writing showing a Bitcoin flash crash due to other unknown reasons.

According to data from blockchain explorer Blockchain.com, a bitcoin address believed to be a U.S. government wallet holding proceeds from the Silk Road hack made a transaction on April 26. However, this was an insider sale of only $0.19, which is still being processed at the time of writing.

Whatever the cause of the flash crash, the sudden and dramatic price drop wreaked havoc on the derivatives market, with liquidations totaling $211 million among cryptocurrency market participants today. Bitcoin traders accounted for nearly $97 million of those liquidations.


Total cryptocurrency liquidations in the past 24 hours | Source: Coinglass

At the time of writing, Bitcoin is trading at $28,863, up 1.68% over the past 24 hours.


As reported by Cointelegraph

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