The price of Bitcoin (BTC) had fallen sharply after news revealed that SpaceX, founded by Elon Musk, was reducing some of its BTC holdings and selling some coins.
James Butterfill, head of research at Coinshares, an investment group, said that the market response to SpaceX's Bitcoin depreciation and sale was strengthened by lower trading volumes and reduced volatility in the crypto market. He said this made the market extremely sensitive to much larger transactions.
He also noted that historical data shows that the market has generally reacted sharply to Elon Musk's actions, suggesting that this latest event could further dampen investor sentiment.
Only 463 BTC Is Enough to Sell For The Bitcoin Price To Depreciate By 1%
According to data from CCData, an information provider in the cryptocurrency industry, only 463 BTC, worth approximately $12 million, had to be sold in the recent crash to bring the price of Bitcoin down by one percent of its current market value, demonstrating the weakness of liquidity.
In March, however, when the crypto markets were rocked by the collapse of Silicon Valley Bank, 856 BTC, equivalent to roughly $17 million at the time, had to be sold to move the token price more than 1 percent.
The fact that the liquidity has been so low lately reveals that the market is more open to manipulations.
*Not investment advice.
