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Following a wild night of trading that saw the price of Bitcoin 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 crypto 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.
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. Ethereum 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.