Following a wild night of trading that saw the price of BitcoinBitcoin take a sharp drop to $4,000 per coin, the market has found some stability in the early afternoon.
Bitcoin is now trading for around $5,200, testing resistance at the $5,000 mark. The cryptocrypto asset has now lost 50 percent of its value since mid-February, when it was trading above $10,000 per coin.
The flash crash last night stunned the market, leaving many investors wondering why the price of Bitcoin had crashed so hard so fast. Some analysts believe that the institutional money in Bitcoin has it now tethered to traditional markets—as stocks go, so does now crypto. The last few days of trading would support that view.
Why did the Bitcoin price crash twice in two days?
The price of Bitcoin has dropped 20% for the past two days running, falling from $9,000 to as low as $4,100. It’s currently back up to $5,400 but it’s changing rapidly. Such declines are not unheard of in the crypto industry but these large back-to-back losses are fairly rare, even for Bitcoin. So, what caused them? The wider market decline The main cause appears to be the crash of the traditional markets. US stocks fell into a bear market on Thursday, as all major indexes fell a further 10%. “...
Stocks today are beginning to show signs of recovery. The Dow is now on the way back up, having gained 800 points since yesterday. Market analysts attributed the bounce to gains in Intel and JPMorgan Chase shares.
Investors may perhaps have regained some confidence following announcements from Congress and the White House, which are working to develop a stimulus package designed to boost the American economy and stem the damage done as a result of the spreading coronavirus.
There is no such stimulus coming to the crypto market. EthereumEthereum and XRP, the second and third largest cryptocurrencies by market cap, are each down 10 percent on the day.
Total market capitalization for cryptocurrency has been slashed today by another $50 billion. It now stands at $150 billion, as of the time of this writing.
