Bitcoin price has plummeted by 14% from $21,500 to $17,166 on Nov. 8 after topping $21,500 on Nov. 4.
Despite Bitcoin’s price decline, the Nasdaq only fell by 0.32%, while the Dow Jones gained 0.48% in anticipation of the United States midterm elections on Nov 8.
The Reason Behind The Drop
Currently, $614 million in BTC longs will be liquidated as a result of current volatility, with over $224 million liquidated on November 8.
For many, if the FTX issue does not get resolved by Binance’s bid for the exchange, a sharper sell-off in the market would trigger a liquidation cascade and fuel further declines in the price of BTC.
Moreover, in September the Consumer Price Index report showed that United States inflation increased by 0.6%.
According to the Consumer Price Index report, which is widely followed as a measure of inflationary pressure, the overall rate of inflation in September 2022 rose to 8.2% from 8.1% expected by experts.
Bitcoin’s price dropped 12% in 24 hours before the CPI report on Nov. 10, setting a new record low for 2022.
The Probability for Bitcoin Price Going Up
Long-term institutional investors appear unconcerned with the short-term instability of cryptocurrencies.
An institutional investor poll commissioned by BNY Mellon found that 91% intended to invest in tokenized assets in the following years, according to the CEO Robin Vince.
There are about 40% of them who own cryptocurrency, and approximately 75% of them are actively investing in digital assets or are thinking about doing so.
Worries about FTX’s potential bankruptcy clearly contributed to the recent decline in Bitcoin price.
Despite this, participants in the market still expect Bitcoin’s price to rise in the long run, especially as more banks and financial institutions prefer digital cash for settlement.