Causes of Bitcoin (BTC) Fall Below $27,000 and What to Expect from Its Price

Bitcoin (BTC) plunged below $27,000 after a daily bounce amid encouraging US inflation data. At the time of writing, the largest cryptocurrency by capitalization has slightly recovered its positions and is trading at around $27,400.

The sharp drop, as expected, triggered a cascade of liquidations. According to the platform Coinglassthe total value of long positions (longs) liquidated within an hour exceeded $47 million.

The US government did not sell bitcoin

Many members of the crypto community were quick to associate the BTC price decline with a possible sale of coins by the US authorities. A similar incident occurred at the end of April, when user @tier10k erroneously reported the movement of funds stored on the wallets of the bankrupt Mt Gox exchange and the US government.

However, this time the panic was avoided. Well-known on-chain analyst @ZachXBT wrotethat the addresses associated with the authorities did not make any transactions.

Analytical platform Arkham Intelligence also denied the rumors and explained that the problem arose as a result of marking the address by the user: the platform interface allows you to manually add labels to wallets and change data sets, which one of its clients probably took advantage of. The company said it only identified seven bitcoin wallets linked to the US government, and none of them moved.

Crypto enthusiasts have rightly pointed out that Arkham’s approach to labeling addresses is clearly a problem, as user labels cannot be distinguished from official ones.

What to expect from the price of BTC in the near future

However, analysts almost unanimously agree that Bitcoin may soon expect a significant correction. The Glassnode platform reports increasing selling pressure, and Kaiko researchers note that there is a lack of liquidity in the markets.

Recall that earlier the editors of BeInCrypto collected in one review the bitcoin forecast for 2023, which experts shared with us.

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