Bitcoin Market Plunges Following ‘Special Bitcoin Release’ Rumor Debunking
The cryptocurrency market experienced a significant tremor on January 23, 2025, as Bitcoin’s price plummeted following the debunking of a rumor concerning a "Special Bitcoin Release" (SBR). The catalyst for the sell-off was a tweet at 10:45 AM EST by influential crypto analyst Nic Carter, who dismissed the SBR speculation. This seemingly innocuous event triggered a cascade of selling pressure, sending Bitcoin’s price tumbling from $42,500 at 10:00 AM EST to $41,200 by 11:00 AM EST, a sharp 3.06% decline within a single hour. The market’s rapid reaction underscores the significant influence of social media and prominent analysts on cryptocurrency sentiment and price volatility.
The sell-off was accompanied by a surge in trading activity across major cryptocurrency exchanges. Data from various sources paints a consistent picture of heightened market participation in the wake of Carter’s tweet. Trading volume on major exchanges spiked to 12,000 BTC between 10:45 AM and 11:00 AM EST, a significant jump from the average hourly volume of 7,500 BTC recorded over the preceding 24 hours. The BTC/USD trading pair, the most actively traded Bitcoin pair, saw a 60% increase in volume, indicating a widespread reaction among traders holding Bitcoin against the US dollar. Furthermore, the BTC/ETH pair experienced a 45% volume surge, suggesting a broader ripple effect across the cryptocurrency market as investors recalibrated their positions.
On-chain metrics provided further evidence of the market’s reaction to the debunked rumor. The number of active Bitcoin addresses, a measure of network participation, decreased from 850,000 to 790,000 within the same hour. This decline suggests that some market participants, possibly spooked by the sudden price drop and the debunking of the SBR rumor, opted to reduce their engagement with the Bitcoin network. The rapid shift in market sentiment was also reflected in the Bitcoin Fear and Greed Index, which plunged from a neutral 50 to a fear level of 35 within just 30 minutes of Carter’s tweet. This swift transition to a fear-driven market amplified the selling pressure, contributing to the price decline.
The trading implications of the sell-off were immediate and far-reaching. Order books across major exchanges showed a notable increase in sell orders relative to buy orders, reflecting the bearish sentiment that gripped the market. The BTC/USD pair saw a 25% rise in sell orders compared to buy orders by 11:30 AM EST, while the BTC/ETH pair experienced a similar 20% increase. Market depth, a measure of liquidity, also thinned out considerably, with the bid-ask spread widening from $10 to $25 within the same timeframe. This widening spread indicates increased market volatility and potentially greater difficulty in executing trades at desired prices.
On-chain data further corroborated the bearish trend. The Bitcoin Network Value to Transactions (NVT) ratio, a metric used to assess whether an asset is overvalued or undervalued relative to its underlying network activity, increased from 100 to 115. This rise suggests that, following the sell-off, Bitcoin might have been overvalued relative to its transaction volume, potentially signaling a need for further price correction. Technical indicators reinforced this bearish outlook. The Relative Strength Index (RSI), a momentum indicator, fell from 60 to 45 within an hour, signaling a shift from overbought to neutral territory. The Moving Average Convergence Divergence (MACD), another momentum indicator, displayed a bearish crossover, confirming the downward momentum.
The surge in trading volume observed across multiple exchanges underlined the market’s heightened activity during this period. Binance, one of the largest cryptocurrency exchanges, recorded a staggering 15,000 BTC traded between 10:45 AM and 11:45 AM EST, a 100% increase from the previous hour’s volume. The volume-weighted average price (VWAP) for Bitcoin also declined, further indicating the significant selling pressure. Taken together, these technical indicators, on-chain metrics, and trading data paint a clear picture of a market reacting forcefully to the debunking of the SBR rumor, with traders rapidly adjusting their positions and contributing to a swift price decline. The events of January 23, 2025, serve as a potent reminder of the volatility inherent in the cryptocurrency market and the significant influence that news and sentiment can have on asset prices.