Bitcoin Plunges 5% to $26K: Fake News, Congestion, & Rumors to Blame?

• A flash crash was triggered by fake news about the sale of 9,800 BTC by the U.S. government.
• The Bitcoin and Ethereum blockchains are congested, which is causing uncertainty in the crypto market.
• Unconfirmed rumors concerning Binance US and Grayscale have been circulating, adding to the bearish sentiment that Bitcoin may crash to $25K.

Flash Crash Triggered by Fake News

A flash crash was triggered on May 10th when fake news spread about an alleged sale of 9,800 BTC by the U.S. government causing a deep pullback in the price of Bitcoin.

Uncertainty and Bearish Pattern Fuel Market Dump

Uncertainty is high in the crypto market with DXY hovering above crucial support at 101.8 and Jump and Jane Street leaving due to regulatory concerns creating a liquidity issue leading to higher volatility as orders move faster. Additionally, there is a bearish head and shoulders pattern on Bitcoin’s 1-day chart which could signal a crash to $25,000 if it reverses cleanly.

Bitcoin Blockchain Congestion

The blockchain for Bitcoin has become clogged due to influx of Ordinals and meme coins, leading some people to believe it is a distributed denial-of-service (DDoS) attack furthering turmoil in the market.

Grayscale Debt Rumors Circulating

Grayscale is being debated because DCG allegedly owes bankrupt crypto lender Genesis Trading about $575 million next week with speculation that they may be selling something on Coinbase to cover this debt if true.

Conclusion

Uncertainty remains high in the crypto market with fake news triggering a flash crash as well as congestion from Ordinals and meme coins coupled with rumors of Grayscale debt potentially being sold off Coinbase all contributing factors leading traders to fear that it may signal a dip below $25K for Bitcoin prices in the near future