Bitcoin plunges 14% overnight… 165 trillion won evaporated in an instant

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The price of bitcoin, which has been on the rise recently, is fluctuating, with a drop of more than 14% overnight.

According to Bithumb, a domestic coin exchange, the price per bitcoin as of 5:20 am on the 11th broke the 40 million won mark. It plunged to 34.3 million won at 1:40 am on the 12th. That’s a 14.3% drop in bitcoin value before the day passed. As the price of bitcoin surged from $10,000 in October last year to $40,000 in recent years, price volatility is increasing in recent years. In some cases, the fluctuation of $10,000 per day occurs.

CNBC reported on the 11th (local time) that “the value of virtual currency has evaporated about 150 billion dollars (about 165 trillion won) overnight due to the sharp drop in bitcoin price.” As of 9 am on the 12th, it is trading at the bitcoin price of 39 million won.

In the industry, the background of the short-term plunge in bitcoin prices is a rise in US Treasury yields, a rise in the Miner Position Index (MPI), and tether risk.

First of all, the investment industry estimates that the recent 10-year US Treasury bond rate recovered 1% in 10 months, showing a rebound, and the coin rally was put to a brake. The U.S. 10-year Treasury Bond rate serves as a reference point in the global financial market, and the stock market as well as the ordinary bond market reacts sensitively to 10-year bond rates. The preference for safe assets has strengthened, and the feelings toward virtual assets have decreased. In fact, on the 11th (local time), Reuters analyzed that “as the value of the dollar has risen significantly due to the rise in US Treasury yields (fall in price), investments are rushing into safe assets.”

The rise in the Miner Position Index (MPI) is also pointed to as the cause of the plunge in Bitcoin. The MPI is an indicator of how much bitcoins are being transferred by miners, and the higher it is interpreted as a signal that the miners’ pressure to sell bitcoins increases. According to Cryptoquant, this index was 2.2 at 10 days. If this index exceeds 2, it means that most miners have a strong tendency to sell. Currently, the transparency of the blockchain allows third parties to understand the transmission path of miners.

Risks related to tether (USDT), a type of virtual currency, also acted. As the deadline for filing the tether litigation documents on the 15th is imminent, there is a possibility that USDT’s transaction will be suspended in the United States if the level of penalties in the case is high.

Ascending fatigue due to the rapid ascent also seems to have worked.

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