The Bitcoin Foundation editorial team explains what happened to bitcoin in late May and why BTC▼$63,044.00’s price crashed again.
On May 28, Bitcoin (BTC) momentarily crashed to $72,728, its lowest level since mid-April. Amid renewed escalation between the US and Iran, the leading cryptocurrency crashed, and the entire crypto market turned red.
At the time of publication, the leading cryptocurrency has corrected to approximately $73,200. Over the past 24 hours, the coin lost 3.5% of its value, and over the week, it is down 6%.
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Contents
Why Did Bitcoin and the Crypto Market Crash on May 28?
Overnight on May 28, the US struck Iranian drones and targets near the Strait of Hormuz. Iran responded by attacking a US base in Kuwait. This threatened the recent ceasefire and a potential deal between the countries. Amid the news, investors began mass-exiting risk assets.
Crypto Market Liquidations
Over the past 24 hours, more than $930M in positions were liquidated on crypto exchanges. Approximately 165,000 to 167,000 traders were affected. Long positions accounted for 93% of liquidations.
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BTC ($363M) and Ethereum ($240M) were the hardest hit. The largest single liquidation was a $15.34M BTC long on the Hyperliquid platform. The wave of forced closures amplified the price drop.
Bitcoin Forecast: Further Crash Possible
Fund manager Michael Kramer warns that bitcoin could continue falling. From May 28 to June 5, the US Treasury will conduct operations that will remove approximately $150B in liquidity from the system through T-bill and coupon settlements.
“Bitcoin is an excellent liquidity indicator. With such an outflow of cash, it could go significantly lower,” Kramer noted.
BTC has already broken through important support at $75K and is showing weakness amid a strong dollar and rising Treasury yields.
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