Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

3 Reasons Why Bitcoin Dropped Below $51,000 Over The Weekend

By Crypto BriefingCryptocurrencyApr 19, 2021 01:52AM ET
3 Reasons Why Bitcoin Dropped Below $51,000 Over The Weekend
By Crypto Briefing   |  Apr 19, 2021 01:52AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

An unverified tweet, coupled with a drastic drop in Bitcoin’s total mining hashrate, kicked off cascading liquidations in the crypto derivatives market.

Key Takeaways

  • Bitcoin crashed to lows below $51,000 late Saturday due to forced liquidations of long orders.
  • A string of bad news triggered the sell-off, however, only one of them was verifiably true.
  • While many indicators point to a "buy the dip" action, the volatility may persist this week.

Bitcoin and the broader crypto market saw one of the most gruesome crashes, leading to $9 billion in liquidations. There were three key sources of the negative catalysts.

1. Money Laundering Report Clips Bitcoin

The price of Bitcoin plunged to lows of $50,900 on Binance while Coinbase (NASDAQ:COIN) recorded $51,300 at 11:35 pm ET time on Saturday.

A drop of 12.3% occurred within 20 minutes, starting at 11:15 pm. Apparently, it was triggered by a tweet sent almost an hour before (ET) that claimed the U.S. Treasury was investigating financial institutions for illicit use of crypto.


Prominent crypto lawyer Jake Chervinsky raised skepticism on the credibility of the news. He stated that the “treasury doesn’t charge money laundering (DOJ does).” Moreover, there are no other reports of the claims.

While the unverified source was the last tipping point, bearish pressure had been building in the market all day.

The Bitcoin mining hashrate dropped by 40% a week after an accident in a Chinese coal mine halted operations in the entire Xinjiang region. The drastic change raised concerns around Chinese dominance over the market, with one region affecting nearly half of the total hashrate.

Last but not least, rumors of a sell-off of COIN shares by Coinbase executives had also weakened the market’s spirits, which was ironically heightened last week for the same reason.

Pseudonymous Twitter account Crypto Randy posted Apr. 17 that the chief product officer and financial officer at the exchange sold nearly all of their shares at launch Wednesday.

COIN plummeted to lows of $309 from a $430 peak the day after its debut.

However, financial experts have contested those claims and guessed that a mix-up of forms and failure to differentiate between actual shares and options contracts led to the misunderstanding. Eric Yakes, CFA, who brought the issue on Twitter has deleted the tweet. Moreover, experts like Meltem Demirors, CFO at CoinShares, stated that Coinbase executives only hedged their holdings, which is still probably above 90%.

Together, the buildup of negative pressure blew out over the weekend after the suspicious U.S. Treasury report.

2. The Sell-Off

The liquidation price of over-leveraged long Bitcoin and altcoins orders, primarily on Binance, was completely wiped out. Traders forced to sell at those prices amplified the sell-off, causing a domino effect on the price.

Over $9 billion, mostly in long orders, were liquidated, with Binance users accounting for nearly 50% of the total amount. Huobi, ByBt, and Okex each recorded over $1 billion in liquidations.

Crypto Market Liquidation Data After The Crash On Apr. 17
Crypto Market Liquidation Data After The Crash On Apr. 17

Those traders were mostly long Bitcoin ($4.94 billion) and Ether ($1.07 billion).

The funding rate for perpetual contracts had dropped to lows not seen since the March 2020 crash. The largest-ever liquidation seen since the crash suggests that the worst might be behind.


3. Buy The Dip Action

The “buy the dip” action was also visible in the Coinbase Premium indicator, where the larger difference between spot prices on Coinbase Pro and the derivatives market indicates strong buying action by institutions.


BTC Coinbase Premium Index
BTC Coinbase Premium Index

However, the confirmation of the local bottom warrants consolidation above the weekend's lows in the coming days.

The funding rate of Bitcoin perpetual contracts on Binance has retaken a bullish stance—around 50% annual percentage rate—which is a worrying signal in the short-term.

Lastly, if the rumors around the regulatory crackdown are true, it could mark a generational top on Bitcoin.

Original Post

3 Reasons Why Bitcoin Dropped Below $51,000 Over The Weekend

Related Articles

Crypto Briefing
China’s Central Bank Calls For Crypto Trading Ban By Crypto Briefing - Jun 21, 2021 1

Fears of crypto trading suspensions in China dragged the price of Bitcoin down today, taking altcoins with itKey Takeaways China's central bank has issued guidelines for a harder...

3 Reasons Why Bitcoin Dropped Below $51,000 Over The Weekend

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email