What Caused the June 2018 Bitcoin Price Crash?

At the point of writing this, on the 10th June 2018, Bitcoin's USD price has dropped just over 11% in the past 24 hours. Other cryptocurrencies like EOS have dropped as much as 20%. This guide will go through some factors that may have caused this sudden drop in price (what many people call a 'crash').


Long-term factors causing Bitcoin's price to decrease?

Although many blame this crash on recent news, there have been several longer-term trends that you should be aware of:

  • Bitcoin's monthly trading volume has been decreasing for the past 4 months (on specific days it's had large spikes, but using the monthly totals it's been decreasing). Many consider low trading volume an indicator that price will also decrease.
  • Interest in Bitcoin on Google Trends has been decreasing since early February 2018 (this is likely a contributor to the decreasing trading volume). Is there a relationship between interest in Bitcoin & its fiat price? (you can do this comparison yourself)
  • Very speculative: There have been several posts suggesting that Bitcoin follows an up or down trend between the 6th of each month, with many claiming the 6th June 2018 was the point when Bitcoin may begin going up in value again. Others have posted that because Bitcoin has started going down now, after the 6th June, it will continue to go down until the 6th July 2018, and may then either start going up again or continue down.

Short-term factors causing the crash?

Some other more recent factors that likely contributed to the recent price drop:

  • On the 9th June 2018, news articles were posted around "regulators from the US Commodity Futures Trading Commission (CFTC)" demanding trading data from several cryptocurrency exchanges, with the goal of investigating market manipulation.
  • News has been posted on the 10th June 2018 around an exchange called CoinRail getting hacked. This exchange was ranked 90th in the world by 24 hour trade volume at the time, so although this may be a factor in the price drop it doesn't seem like the main cause.
  • There have been several posts around a Bitcoin whale (someone holding large amounts of Bitcoin) transferring it to the Huobi exchange recently and potentially selling large amounts. Looking at this article, deposits do seem to have been made from a large wallet to Huobi, and the Huobi exchange has had almost $200m traded between Bitcoin and USDT in the past 24 hours, so this is a possibility (selling say 4k Bitcoin would have caused a sell volume of around $27m-$29m given Bitcoin's price at the time).

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