Bitcoin's Price Plummets to Two-Month Lows, Brief Dip Below $26K

Precipitous Drop

The price of Bitcoin (BTC) experienced a sudden and sharp decline, dropping by around 8% in just 10 minutes. This brought the cryptocurrency's value well below the $26,000 mark, before partially recovering.

Lows and Partial Recovery

Bitcoin's price began the descent from approximately $27,677 on August 17 at 9:30 pm UTC time. It eventually hit a low of $25,409, according to Coinmarketcap. Notably, on crypto exchange Bitfinex, the price even dipped further to $24,715, before bouncing back above $26,000.

Possible Reasons

Early theories from the X community on Twitter point to SpaceX, which allegedly wrote down the value of its Bitcoin holdings by $373 million and subsequently sold the cryptocurrency. Others have also speculated that China's Evergrande Group filing for Chapter 11 bankruptcy in New York may have played a role.

Market Impact

Bitcoin's market cap has now fallen below $500 billion for the first time since June 16. Additionally, these recent lows have not been seen since June 20, indicating a significant downturn for the cryptocurrency.

Increased Volatility

Notably, cryptocurrency analyst Will Clemente observed that Bitcoin experienced the largest single-day increase in BTC implied volatility this year, suggesting the potential end of the volatility drought.

Conclusion

Bitcoin's price plunge to two-month lows reflects a volatile market that remains susceptible to sudden and substantial fluctuations. This latest drop highlights the impact of external factors, such as corporate actions and broader economic developments, on the cryptocurrency's value.