$21 Billion of Cryptocurrency Market Value Gone!
The cryptocurrency market took a significant hit with more than $21 billion in value wiped off the market within 24 hours. CNBC sights the huge sell off in line with the massive drop in oil prices, along with the drastic sell-off in the stock market.
According to CNN, Saudi Arabia stunned the market by slashing price in a bid to regain market share. The market is already suffering with demands declining due to the coronavirus outbreak and prices dropped a further 10% on Friday after the inability of OPEC and Russia to strike a deal to cut production in a bid to prop up the market. Saudi Arabia’s latest action further compounded the issue with fears of an oil price war looming.
In addition, earlier claims suggesting that cryptocurrencies are a safe haven in relation to the recent coronavirus outbreak seemed to be debunked with the recent price crash. While some claim that the sell-off in other markets are unrelated to Bitcoin’s price drop, the declining volume in many crypto markets proves otherwise as it shows lack of liquidity and higher chance of a price drop as recently experienced.
Image Source: The BlockCrypto
Bitcoin, the largest cryptocurrency in the market, experienced an 8% drop in value and traded as low as $7,981 from its $9,199 peak at the end of the week. According to Forbes, prices of other major cryptocurrencies such as ETH and XRP were also in the slumps with double-digit percentage point losses. Ethereum is currently trading at around $205 at the time of writing after losing 10.72% of its value, while XRP lost 10.52% to trade at $0.2082.
On top of the selling pressure, Bitcoin prices are not enjoying as much liquidity as miners are stashing their mined Bitcoins with the assumption that the decreased supply after May’s halving will increase the demand.
On the other hand, Charlie Morris, founder of crypto analytics platform ByteTree, also added that miners are stockpiling to stop prices from dropping further if there’s more selling pressure.
There are more than a few factors in play for the recent price crash of cryptocurrencies. Long-term traders and hodlers may be feeling the heat due to the recent bearish market, but there’s always opportunities to profit on different time frames and crypto pairs. Always be prepared for market opportunities by downloading our app now and begin your trading journey.