Bitcoin (BTC) Crashes, Losing Support Above $10,000

As the end of August approaches, Bitcoin (BTC) lost support, sliding by more than $600 within an hour.

Bitcoin (BTC) had another flash crash late on Wednesday, suddenly breaking down from the level above $10,200 to $9,700. BTC continued with a gradual slide, to trade at $9,579.06 as of 8:00 UTC on Thursday. Once again, altcoins were more deeply affected, and now the market cap dominance for BTC is actually higher at 69.1%.

This type of flash crash is not unseen for BTC, but this time, the drop happens despite upcoming favorable news like the launch of the Bakkt exchange next month.

Analysts tie the drop in BTC prices to the lowered Tether (USDT) activity. New injections of USDT have stopped, leaving the supply at 4.43 billion coins. Additionally, the activity of Ethereum-based USDT has diminished, coinciding with the slide in BTC prices:

https://twitter.com/soleil_dusoir9/status/1166934989159751681

There are worries that without a boost from USDT trading, BTC prices may not keep up their levels, and drop down to much lower valuations. During the previous slide to the $9,500 range, predictions appeared of BTC moving down under $8,000. But BTC recovered just as fast, bouncing again above $10,000.

After the latest price drop, BTC is about to end the month with no net gains, despite reaching a monthly peak above $12,205. A series of price slides in the second half of August wiped out most of the gains.

Now, BTC is once again at a crossroads, with the potential of a fast rally, or another slide to a lower range.

The most recent sell-off depressed the BTC trading sentiment, as the index of greed and fear turned down a notch. Now, the prevailing mood is down from “fear” to “extreme fear”, a level resembling the bottom of the bear market in 2018 and early 2019. Based on historical data, sentiment switched for BTC at the end of July, tending to become more pessimistic.