Here’s why Bitcoin, Pepe, Mantra, Tron prices are crashing

Cryptocurrency prices continued their downward trend on Friday morning as traders focused on the rising risks in the industry. Bitcoin moved below $55,000 for the first time since February, undoing most of the gains made earlier this year. 

Bitcoin’s crash has also triggered a deeper nosedive of other tokens like Pepe, Mantra, and Tron. Mantra was trading at $0.6765 while Pepe retreated by over 20% in the past 24 hours to $0.0000078. Tron price also retreated to $0.123.

Bitcoin vs Pepe vs Mantra vs Tron

Donald Trump could lose the election

The first reason why Bitcoin and other cryptocurrencies are crashing is that Donald Trump could lose the election later this year. This is happening as Democrats continue putting more pressure on Joe Biden to drop out of the race after last week’s debate.

The influential heirs of Walt Disney have said that they will not fund Democrats until Biden drops out. The New York Times and even the Washington Post have asked Biden to drop out as polls showed him losing the election.

Therefore, there is a risk that Biden will be replaced by a younger candidate like Kamala Harris, Gretchen Whitmer, and Gavin Newsom. If this happens, there is a chance that Trump will lose and that Gary Gensler will remain as the SEC Chair.

Donald Trump is campaigning as the crypto candidate and is seen as being more friendly to the industry.

Germany and Mt.Gox liquidations

The other reason why the Bitcoin price is crashing is that the German government has continued to liquidate its huge portfolio of coins. It has moved hundreds of coins to exchanges like Coinbase, Bitstamp, and Kraken. This means that it will likely continue selling its 40k coins in the near term. 

A wallet associated with Mt.Gox has also started to move coins, a step that is important for liquidation.

Additionally, many Bitcoin mining companies have started to capitulate by selling their coins while BTC ETFs have seen substantial outflows. All this has led to an increase in Bitcoin balances in exchanges.

Lack of a major catalyst

Bitcoin and other cryptocurrencies have crashed hard because the industry lacks a clear catalyst as we saw earlier this year. 

The first, and probably the most important catalyst was the approval of eleven spot Bitcoin ETFs by the SEC. This approval led to billions of dollars in inflows as was widely expected. Today, all these ETFs hold assets worth over $50 billion.

The other catalyst was the Bitcoin halving event, which happens every four years. In most cases, cryptocurrencies rise ahead of the halving event and then enter a crypto winter shortly after it happens. 

Now, there is no major catalyst that is expected to move the price of Bitcoin higher. The likely news will be the upcoming approval of spot Ethereum ETfs. While this approval is important, I believe that its impact will be limited since it has already been priced in.

Fear and greed index falling

All these events have led to a sense of fear in the crypto industry. The crypto fear and greed index has dropped to the fear zone of 38, its lowest point since November last year. In most cases, cryptocurrency prices crash when there is a sense of fear among market participants. 

There are other reasons why Bitcoin has collapsed, triggering a sell-off of other tokens like Pepe, Mantra, and Tron. For example, technically, the coin formed a double-top chart pattern, which is one of the riskiest patterns in the market.

Bitcoin formed a double-top pattern

Bitcoin has also crashed below the Ichimoku cloud and the 200-day moving average, meaning that sellers have prevailed.