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Here’s what caused Bitcoin’s flash crash to $29,000

Bitcoin bear market

A businessman covers his eyes, unable to see the falling share price and the ominous shadow of a bear cast on the wall above him.

After reclaiming this level of support from the bears, bitcoin floated above $31,000 for most of Friday. However, this did not last long as the digital asset experienced a flash crash that propelled its price towards the $29,000 level.

SEC says ETF filings are inadequate

On Friday, the Wall Street Journal published a report that had a negative impact on the market. The report revealed that the U.S. Securities and Exchange Commission believed the recent spate of bitcoin-ETH filings it had received were insufficient in its filings.

This follows a two-week streak of positivity after heavyweights such as BlackRock, WisdomTree, and Fidelity, among others, filed filings with the SEC for bitcoin spot ETFs. Following news of the filings, Bitcoin’s price surged, surpassing $31,000 for the first time in over a month.

However, news from the SEC that the filing was inadequate quickly dampened investor sentiment. BTC’s price fell to $29,200 on Friday afternoon before quickly recovering. Although the damage has already been done and BTC bulls are now struggling to sustain the $30,000 support.

Bitcoin in free fall

Bitcoin has been able to establish a reasonably bullish trend in recent weeks. But that didn’t last long as the SEC burst the bubble for investors. As a result, Bitcoin appears to be in free fall and there is no proper support to prevent the price from falling.

BTC Struggles to Hold $30,000 | Source: BTCUSD on TradingView.com

In a matter of hours, the digital asset has lost roughly $1,000 in value, turning what was previously a good day into a bloody day for investors. This rapid drop has pushed the cryptocurrency below its 5-day moving average, which could see BTC turn bearish over the weekend.

However, over the medium and long term, the digital asset remains as bullish as ever, trading above both its 50-day and 100-day moving averages. Both levels suggest that while the bears have temporarily gained control of the price, the bulls remain largely in control. And as long as selling pressure remains low, BTC could rally back above $31,000 in the next few days.

At the time of writing, BTC is down 1.59% in the last 24 hours and is trading just above $30,000. Although it is currently struggling, its trading volume tops $23.5 billion, showing that there is also significant demand for the digital asset.

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