• The Bitcoin price has fallen below the psychologically important support of US$ 8,000.
• Possible reasons for the crash are numerous and range from the coronavirus, PlusToken scam to a declining trading volume and the activities of Bitcoin miners.

The Bitcoin price is currently in a continuing free fall. After the price was still over USD 9,100 on Saturday (16:00 UTC), it had fallen to USD 7,935 at the time of publication and thus below the psychologically important USD 8,000 mark. Temporarily, the BTC price plunged to USD 7,690 in the early hours of the Monday morning (5:30 UTC), but has since recovered slightly.

Reasons for the crash of the Bitcoin price

The causes of the downtrend are still being heavily discussed in the crypto community. As CNF reported yesterday, three factors in particular are at the center of the discussions. The Coronavirus, the PlusToken scam and the Bitcoin miners currently accumulating Bitcoin. In particular, the fraudsters of PlusToken from China, one of the largest scams in the history of Bitcoin, are suspected to have triggered the sell-off.

A few days ago, the fraudsters had sent a total of 13,000 Bitcoin (BTC) to a mixer in several transactions. As some analysts claim, the movements indicates a dump. The masterminds behind the PlusToken scam may again attempt to liquidate their Bitcoin.

As Chainalysis noted in a December study, the last major transactions by the scammers probably caused the price drop from $13,000 in June 2019. The study concluded that the payouts by the PlusToken scammers correlated, at least over time, with the decline in Bitcoin prices and caused increased volatility. A similar situation may occur again at the moment.

However, not only PlusToken, but also the coronavirus currently seems to have a major impact on the Bitcoin and crypto market. Contrary to the safe harbor thesis, the crash of Bitcoin occurs parallel to the turbulence on the global stock markets. The Dow Jones fell dramatically last month, from 29,276 to 25,864 points. The price of oil has fallen by 30%, while gold, as a safe haven, has risen to nearly $1,700. The thesis of Bitcoin as a hedge in times of crisis is therefore more questionable than ever.

Jacob Canfield sees the activities of the Bitcoin miners as another reason for the current situation on the crypto market. Bitcoin miners currently sell very little of their mined Bitcoin and hoard it in anticipation of an upward trend as a result of the Halving. As ByteTree’s Charlie Morris noted, historically, if the miners sell less BTC than they mine, Bitcoin’s price development is rather poor. This factor could contribute negatively to the current situation.

Another factor that should not be neglected is the fact that since March 1st Bitcoin has suffered a decline in trading volume and a noticeable drop in open interest for Bitcoin futures, which has certainly added to the bearish sentiment.

What does the future hold for Bitcoin?

Bitcoin’s weekly close on March 8th was eagerly anticipated by many traders. Since Bitcoin’s rejection at the $9,200 resistance level, many technical analysts have argued that BTC could suffer further losses if the $9,500 mark is not recaptured.

Josh Rager, a prominent crypto trader, recently noted that Bitcoin has had a horizontal support between $7,700 and $7,995. The Bitcoin price has today bounced off this support. In his latest tweet, however, Rager warned that the “7,000 dollars will come”. Whether this strongly bearish prediction will prove true, however, remains to be seen.

https://twitter.com/Josh_Rager/status/1236823918624849923

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