Alex Krüger: “This is why the bitcoin price fell”

-->Popular macroeconomist Alex Krüger explains why he thinks bitcoin has been on the rack in recent days. In a publication on Twitter he describes the four most important reasons for the price falls in order of importance.

According to him, the excessive use of leverage (investing with borrowed money) is the main reason for the misery.

4 reasons for the bitcoin crash

According to Krüger, the first and most important reason for the bitcoin crash was the use of borrowed money (leverage) for investments in the digital currency.

As soon as bitcoin starts to climb you often see that people become optimistic and especially greedy. The price continues to rise and to benefit even more from these movements, people borrow money to invest what they do not have.

That’s fun, until things go wrong and it turns out that there are also people who take their profits. Then you often see that the price falls faster than it “should” because people who opened positions with borrowed money are forced to close them.

In addition to the use of borrowed money, Krüger also points to the decreased chances of the approval of a Spot Ethereum ETF in the United States. According to him, this is so important that this development comes in second place.

What else plays a negative role?

That gives us the two main reasons. In third place are the negative ETF flows for the American Spot Bitcoin ETFs.

They saw a negative flow over the past three days, causing more than $700 million in capital to disappear from the ETFs.

Finally, Krüger points to the shitcoin mania at Solana, which he believes also shows that we are in an overly optimistic phase of the market.

As soon as people think that they can become millionaires within two days, we are often at a point where it is healthy to start a corrective decline.