Why does bitcoin crash occasionally?

[GetOutOfMyLife]

So, as many of you are painfully aware, bitcoin crashed around 30% over a couple of days, reportedly due to regulatory pressures in Asia, and a potential ban in China due to energy wastage and tax evasion risks etc. Reports suggest that China contributes as much as 70% of the worldwide hashing power, and yet we only saw a 30% drop.

Source: Report: PBoC Quashes Bitcoin Mining Ban Rumor in China

Furthermore, we saw 30%+ drops in other cryptos, even unminable, non-decentralized ones. So, conspiracy theorists, why do you think bitcoin really suffers these sporadic crashes, could it be large-scale market manipulation? Or is it simply FUD leading to a wide-spread panic selling?

[laowang666]

I think the price reduction of bitcoin is a normal phenomenon, it is a very normal adjustment.
A lot of people saw a lot of falls, and they said they broke, I don't think so, I think of it as a correction, so it's better to go up.

[X7]

It is a living market - there are so many factors which contribute to the up and downswings of a token with as much liquidity as bitcoin.

From:

a) Market manipulation
b) Longs/Shorts being called
c) Bot Triggers
d) Greed
e) Fear
f) Safe havens
g) Speculation / store of value
h) Utility


etc etc

[GetOutOfMyLife]

I think the price reduction of bitcoin is a normal phenomenon, it is a very normal adjustment.
A lot of people saw a lot of falls, and they said they broke, I don't think so, I think of it as a correction, so it's better to go up.

A 30% drop doesn't seem like a normal adjustment to me, seems like either market manipulation or a panic sell.

 

It is a living market - there are so many factors which contribute to the up and downswings of a token with as much liquidity as bitcoin.

From:

a) Market manipulation
b) Longs/Shorts being called
c) Bot Triggers
d) Greed
e) Fear
f) Safe havens
g) Speculation / store of value
h) Utility


etc etc

The utility of bitcoin has been decreasing as transaction fees increase, and yet BTC price rose massively in spite of this. I understand it is difficult to understand the exact cause behind the price movements, but still I think we can narrow down the changing parameters if not understand the whole driving force.

[bolawin]

up and down, rise and fall. thats life

[NeuroticFish]

The utility of bitcoin has been decreasing as transaction fees increase, and yet BTC price rose massively in spite of this. I understand it is difficult to understand the exact cause behind the price movements, but still I think we can narrow down the changing parameters if not understand the whole driving force.

To be a way of payment is not the only utility of Bitcoin. Many use it as store of value or as speculative/investment asset. And for that the transaction fees don't matter much.
Of course, since it's an unregulated market, manipulation with FUD (with news, with spam with extreme trust or negativism on forums), bots, maybe even pump and dump (at banks/states level) can be some "recipes" for what happens on the market.
Also, the extremely fast growth calls for correction now and then.

[HeRetiK]

I think the price reduction of bitcoin is a normal phenomenon, it is a very normal adjustment.
A lot of people saw a lot of falls, and they said they broke, I don't think so, I think of it as a correction, so it's better to go up.

A 30% drop doesn't seem like a normal adjustment to me, seems like either market manipulation or a panic sell.

What's the difference between a normal adjustment and a panic sell?

It's normal for markets to overvaluate assets, only to crash down and undervaluate them at a later time. Bitcoin is no exception and much more extreme in terms of price movements, both up and down. I know we've been spoiled by the recent bull market, but the price fluctuations Bitcoin has gone through have been much harsher in much shorter timeframes just a few years back. The reality is that Bitcoin is still a highly speculative asset with little comparables for gauging the "proper" price level leading to the volatility we still see today.

There might be large scale market manipulation at play, but if that's the case it likely was the cause of the recent bull market as well, not just the crash.

[hahahafr]

But they are never going to understand this, we all need a little dip after a huge bullish trend.

I think the price reduction of bitcoin is a normal phenomenon, it is a very normal adjustment.
A lot of people saw a lot of falls, and they said they broke, I don't think so, I think of it as a correction, so it's better to go up.

And no, this is not a crash, and it can not be compared to one.
The price has only dropped 55% from the ATH, and a crash, could be considered when the price drops by more than 80%.

[Nitroali]

So, as many of you are painfully aware, bitcoin crashed around 30% over a couple of days, reportedly due to regulatory pressures in Asia, and a potential ban in China due to energy wastage and tax evasion risks etc. Reports suggest that China contributes as much as 70% of the worldwide hashing power, and yet we only saw a 30% drop.

Source: Report: PBoC Quashes Bitcoin Mining Ban Rumor in China

Furthermore, we saw 30%+ drops in other cryptos, even unminable, non-decentralized ones. So, conspiracy theorists, why do you think bitcoin really suffers these sporadic crashes, could it be large-scale market manipulation? Or is it simply FUD leading to a wide-spread panic selling?

Simply it is a not regulated market so 30% var are normal

[Beehives]

After China closing their farm, South Korea ban and India freezing account of btc the price dip happened. Price dip is good for traders they gain more on it. I guess those anouncement from that huge crypto country is just to stare up the market. Prices will soon soar then.

[cynical]

Fear of the bubble bursting i think was a factor in the correction we had last week.
There was a lot of talk and hype about crypto being in a bubble which was going to burst,
Which didnt happen.
I think any major hype at all in the markets and a lot of people will jump on it.
We saw this before christmas when we almost got to 20k and we saw it again last week.

[secondgarlic]

Fear of the bubble bursting i think was a factor in the correction we had last week.
There was a lot of talk and hype about crypto being in a bubble which was going to burst,
Which didnt happen.
I think any major hype at all in the markets and a lot of people will jump on it.
We saw this before christmas when we almost got to 20k and we saw it again last week.

OK, let's assume the initial drop was due to people being scared that bitcoin is a bubble about to burst.. After that sudden drop the price had begun to recover, so why the drop now? Not only bitcoin, but pretty much every single altcoin is down by double digit percentages.

[amin1372]

It is normal and usual of this month. You can also compare this trend with the last year.

[Kingofbitcoin12345]

There’s one specific reason to it and that is the structure of bitcoin investments all along.. The demand and supply thing that can be triggered with many continuous or simultaneous factors or even a single one that makes the investor especially the new one’s who is more vulnerable to this kind of propaganda’s and bad imaging.. It will not change even if this will go mainstream as competition is always present..

[Coin-1]

Furthermore, we saw 30%+ drops in other cryptos, even unminable, non-decentralized ones. So, conspiracy theorists, why do you think bitcoin really suffers these sporadic crashes, could it be large-scale market manipulation? Or is it simply FUD leading to a wide-spread panic selling?

I think that the primary reason of the current high volatility of Bitcoin is the rumors from the South Korea. The situation is nervous, therefore some people commit a panic sales.

[khansaab]

UPs and Downs are normal in Cryptocurrency.

[Bolt Brownie]

I think it's a mix of both of those things (market manipulation and fud). Although the cryptomarketcap looks huge to the common people, the truth is that those values are quite small, if we compare them to the marketcap of stocks, gold, or any other solid assets. I won't even dare to compare it to fiat marketcap, since crypto want to work as currencies. So yes, they can be easily manipulated. Whales can put walls and lock the price at a certain point. Then they take advantage of the news that could lead the price up or down, and the price ends up moving the way they want. Even if people don't want to go into the fud, and start buying, they price wont go up because of the walls, and since there are a lot of people selling as well because of the news, and there is not clear support, we will see the price go down. This will generate more panic sell, and we have those big dips.

Low liquidity and market manipulation, are in fact the reasons appointed by SEC for not releasing ETFs right now. The crypto markets still need to mature a lot more, before they can deliver what they are promising.

[pixie85]

Usually crashes are the result of manipulation and market being tired of going up. People are starting to have second thoughts and are prone to selling. If at the same time somebody spreads fake news like the one about Korea banning Bitcoin you got yourself a huge selloff.

[Waccamaw]

crash needed after very long time increasing this is normally and healthy for market.
market need some correction after rising for very long time.
last correction happen because south Korea ban exchange sites.

[severaldetails]

The bitcoin price sometimes goes down quickly because too many people want to sell at the same time.
They do that when they are driven by fear.
In most cases that fear is triggered by news that indicate problems on the market of crypto currencies.

There is as well the theory of big players dumping coins in order to create a massive over supply on the market.
Theat leads to a low bitcoin price as well, where the big players buy back, only cheaper. I am not sure if players with such large amount of coins still exist.

A pure pump and dump sceme like we know it from smaller coins, I think bitcoin is too big for that.