What causes sudden overnight drops in Bitcoin's price?

Is this something that happens a lot with cryptos? Bitcoin is basically solid money.

Yes that is a common and normal behaviour for anything traded in the market and governed by the forces of demand and supply. If you check the commodity market, energy market and even stock market, they do the same which is go up and down. If there is more demand than supply, price goes up and when reverse is the case, price goes down. For Bitcoin, you are encouraged to hold because by the nature of Bitcoin, even though it drop in price, it will always recover and give you profit. Remember that the total supply is fixed at 21,000,000 Bitcoin which means as the world population increases and the supply remain fixed, the demand will surely outweigh the supply which will see the price going exponentially up as time progresses.

Totally normal. Who doesn’t love waking up to your portfolio either mooning or being nuked into oblivion? Sleep tight!

It's normal for cryptocurrencies but not all of them that experience volatility are able to pick up. Some of them experience a dip and that's the end for them but Bitcoin is not just the best digital currency to invest your money on, it has proven it isn't just a bubble. Other means of exchange that is traded do have their ups and downs but what'd most important is how they perform when they get back up.

Bitcoin market is lively 24/7 and if you know it, you will not say it usually drops or rises overnight because it is not enough information. It can be overnight hours in your local time but it is possibly day time for people who live in other nations with different time zones. You will see a clearer picture if you can connect most volatile hours of Bitcoin belong to which nations in that time zone. If you notice it and also lay attention on news and FUD, you will see the USA has kind of connections to Bitcoin most volatile hours which can be overnight hours in your nation and local time.

Why do you sometimes want some snacks at midnight? The market is ever-changing, and there are sometimes short-term and mid-term events that may shape it in its wake - then we return back to where we were or started.

So the drop from $117,740 to $116,000 is dRaSTiC? That's a small drop, around 1.5%. Bitcoin ever had suffered 10x bigger than this in a day, yet it still survive until now. You might be a new with Bitcoin, check the price graph and you will see a big plunge and also a huge rise. I search on google, the definition of sound money I got. Bitcoin isn't a sound money because it's not backed by government.

What do you mean by 'overnight' drops, don't forget that we all don't live in your timezone. You should add more details to your post, what drop are you talking about that is so concerning, BTC is still above $118k, are you trying to spread fud? If you are scared of 'overnight' drops, try holding BTC in the day, and then sell to fiat at night, and on you go, lol.

Your claim is partially correct, as it does not happen on bigger exchanges, but does happen on smaller ones. It's just whale games on liquidity. Lower liquidity makes it easier to forcefully liquidate leveraged positions that are held overnight (particularly US nighttime as most of the liquidity usually comes from US traders). Overnight liquidity grabs are common on the recently launched ByBit EU, but pretty much unheard of on Binance for example.

Yeah, I didn't get it too. I think OP needs to get more info in the relative threads to come up with conclusions from his original post.

It doesn't and if you try to trace such patterns in futures trading you'll end up burned. It's best not to try and pattern trade with BTC on any occasion because put simply nobody really knows where it's going to go next. And any pattern noticed becomes useless once many people start trading it because it's a really easy setup to take notice and try to liquidate others. Whales do that routinely. Is it worth it? I don't think. Most people don't realize how useless patterns are for trading.

Smart money doesn't move where we want it - but where the profit lies. And we usually can't do the same

When prices suddenly increase, have you ever asked yourself the question to find the answer? Price fluctuations over a short period of time are how the market works. Bitcoin = Sound Money? Bitcoin doesn't have a voice, but people have a voice in Bitcoin. Bitcoin's voice is the voice of freedom, unaffected by third parties. It's not like a politician's voice. Today they say A, tomorrow A turns into Z.

You complained about the overnight drop in Bitcoin price. Would you also complain when Bitcoin skyrockets overnight? The overnight decrease and increase in Bitcoin price are normal to see. You shouldn't begin to feel bad or complain bitterly about such when the market is volatile(fluctuates up and down). Don't you know about such happenings before starting your investment journey in Bitcoin?

Bitcoin price pumps and dips anytime of the day and not only overnight. I feel that your timezone is why you feel that it's always in the middle hours of the night. However, volatility is the nature of cryptocurrency and fundamental analysis and investors sentiment can come up anytime and thay will affect the market. Forget about what's happening in the market because they are irresistible and keep stacking more sats for the future without planning to time the market.

I don't think this is what the OP probably meant. This is a common expression in some countries. "Overnight" means very quickly or suddenly, and it doesn't mean it only happens over night. In any case, this is very common for Bitcoin and other cryptocurrencies, where volatility is the dominant feature. It's quite normal to see multiple price spikes and falls within the same day or even within hours.

You supposed to mention your country time zone. Your night time may be the evening or morning in some countries. When bitcoin fell yesterday, it was in the evening in my country. I mean when it fell below $116000 yesterday. But the price increased back in the midnight and increased more at dusk. There are times that bitcoin will fall during the day and also overnight. So what you said is strange to me and it is not correct.

There weren't spikes bigger than around 2-3% in the recent days, so I wouldn't think it's the case for BTC. It wouldn't be that big without the rally fully halting.

Because it's basically the free market, which operates 24 hours a day, 7 days a week, with no borders

And because anything can happen during these hours. Literally.