Bitcoin price drops over 10%, closes to $40,000, panic sell increases

Bitcoin price sold off on Monday as stocks suffered their most significant drop in weeks. Signs of stress in China’s credit markets over the weekend contributed to the bearish sentiment in global markets. At the time of writing, BTC is changing hands at $41,826, recording an 11% drop in the past 24 hours.

bitcoin-price-drops-10-closes-to-40000-panic-sell-increases

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price sold off, equity volatility increased

Bitcoin has dropped below the 200-day moving average, repeatedly breaking the initial supports at $42,000 – $41,000; if BTC continues to break $40,000, it will likely fall to the $39,000 zone.

Roughly $1 billion in BTC liquidations occurred Monday morning, and more than 7,000 BTC left exchanges during the same period.

Source: CryptoQuant

“Four hours ago, Bitcoin sunk to $42,760, and Ethereum hit $2,951 for the first time in a month. In the shaded area charts, we see how the ratio of address activity vs. price for BTC and ETH continues hovering at year-lows”, Santiment stated.

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Source: Santiment

Cryptocurrency markets and the US stock market sold off on September 20 due to concerns that the collapse of Chinese real estate giant Evergrande could not only hurt China but also China has a more considerable impact on other markets.

As sentiment declines, traders dump positions they consider risky to move into safe-haven assets. This could be one of the reasons why the Bitcoin price and most significant altcoins plummeted on September 20.

Data from Bybt shows that Bitcoins held in Binance wallets have increased by 29,717 Bitcoins in the past 30 days. History shows that an increase in the Bitcoin balance on Binance has led to a decrease in the price of Bitcoin. Bitcoin balance on Binance increased from 99,700 BTC on April 20 to 347,590 BTC on June 26. During this period, the Bitcoin price dropped from around $57,000 to approximately $30,000.

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Source: Bybt

Obviously, at the moment, the Crypto Fear & Greed Index is showing at “27”, indicating that the market is “Fear.”

Crypto Fear & Greed Index as of Sep 15 | Source: Alternative.me

Crypto Fear & Greed Index as of Sep 21 | Source: Alternative.me

Digital asset investment products saw inflows totaling $42 million last week, signaling another week of improved sentiment among investors. This marks the fifth consecutive week of inflows.

“This improved sentiment could be a seasonal phenomenon, but we do not see a commensurate rise in volumes in investment products,” CoinShares wrote in a report published Monday. “This suggests that some investors are taking advantage of recent price weaknesses and the continued rise in alt-coin popularity.”

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Today, Crypto markets experienced across-the-board losses, with the total market capitalization declining 10.98% in the last 24-hour. Major laggards in the asset class include XRP and Solana, who fell 15% and 12%, respectively.

AVAX, the native token behind Avalanche, has had a volatile past week, following the company’s funding news on Thursday. AVAX declined 18.71% to $58.63 as of press time. However, the altcoin has still made gains of 36.77% in the past month and is 4.79% away from its ATH.

You should know that the broad markets have started showing some signs of a potential medium-term top with weakness since the start of September.

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