Bitcoin Suffered A Massive Price Drop Amid Crypto Business Crackdowns In China

Last week was nothing but a downhill slide for Bitcoin along with the entire crypto sector. Еarly last week, Bitcoin floated around the $8,000 level, but the lack of proper support managed to take the top cryptocurrency below $7,000. Despite the slight return, Bitcoin is trading at around $7,125 as of press time. Investors, however, are considering an even more significant pullback, which could tumble Bitcoin's price even lower.

Galaxy Digital's CEO Mike Novogratz stated his thoughts on the current price situation for Bitcoin, predicting that "Bitcoin would most certainly settle at the $6,000 - $7,400 range for the moment unless strong bullish actions raise its price above $8,000".

"Despite the drop, Bitcoin is up with 95% compared to its state 12 months ago, which is tremendous", Novogratz added.

Another crypto entrepreneur, the founding member of Primitive Crypto Dovey Wan, believes the main reason for the Bitcoin price fall to be the buildup of selling pressure from spot exchanges.

"Margin exchanges are not the primary cause of the selling pressure. Spot trading exchanges like Binance and Huobi are behind the pressure. This means people are actually selling their Bitcoin funds.

Margin trading, however, could be the culprit behind recent price volatility issues across the board. The strong price deviations are caused by cascading contract liquidations. For Bitcoin to move $1,000 to either side, hundreds of thousands of dollars worth of contracts are being terminated on margin exchange platforms.

But most crypto experts believe that the recent Bitcoin price drop is due to the People's Bank of China (PBoC) continues to tighten the rope around crypto exchanges in China. Despite the positive stance of China's President Xi Jinping, the Chinese government still keeps its country away from ICOs.

The price drop could also be due to miners selling off their Bitcoin, thus increasing the pressure. Last week, just moments before Bitcoin's price took a hit, a Chinese miner sold $17 million worth of Bitcoin.