Bitcoin Price Drops 20 Percent. Here’s What Happened


Bitcoin Price Drops 20 Percent. Here’s What Happened
Contents

Bitcoin, the number one cryptocurrency, has recently witnessed a major correction with its price plunging to the $6,300 level. The sudden price crash inevitably turned the whole market red with almost all major altcoins posting double-digital losses.

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A 20 percent flash crash

After its value dropped by more than $1,500, Bitcoin quickly rebounded. According to CoinMarketCap data, the BTC price is currently sitting at $7,280.

Cryptocurrency market crash
Top coins are drowning in a sea of red, image by CoinMarketCap

The most obvious reason for the flash crash was triggered by a mammoth-size sell order of 3,645 BTC that was executed on Bitstamp at around 10:00 PM ET. That essentially explains why there was such a huge price spread between Bitstamp and other cryptocurrency exchanges, such as Bitstamp and Coinbase.

A startling $250 mln worth of longs on BitMEX was liquidated after the BTC price plummeted as a major slap in the face for the bulls.

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The volatility problem

According to trader Alex Krüger, the latest price crash proves destroys the “Bitcoin as a hedge asset” narrative since it is still highly susceptible to market manipulations that are perpetrated by a handful of parties.

Notably, the 20 percent price spike that took place on Apr. 2 was also allegedly orchestrated by a single party by engaging in high-volume trading on multiple exchanges when the liquidity was at its lowest point.

Bitcoin’s fragility could make it less attractive to institutional investors whose money is supposed to be the main catalyst for the long-awaited bull run.

Cover image via 123rf.com
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Bitcoin Price Could Experience Another Setback: Prominent Crypto Expert  


Bitcoin Price Could Experience Another Setback: Prominent Crypto Expert  
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Tuur Demeester of Adamant Research predicts that the BTC price could soon witness another retracement. At the time of writing, Bitcoin keeps hovering above the $8,000 level.

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Is Bitcoin SV to blame?

Some Twitter users suggested that another price downtrend could be caused by Bitcoin SV. As reported by U.Today, the price of BSV skyrocketed by more than 90 percent on May 21 after its creator Dr. Craig Wright copyrighted the Bitcoin white paper. Thus, it almost doubled its market cap, currently occupying 11th place on CMC. While there is no clear link, it is reasonable to suggest that some might have sold their BTC for BSV.   

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A potential double-bottom

Earlier, trading expert Peter Brandt also predicted that another retracement could proceed a full-fledged bull run that has been on everyone’s lips for the past few weeks. Thus, it would be 2015 all over again, with the Bitcoin price reaching a double-bottom before it began to rise for two consecutive years.

Right now, the Bitcoin price is desperate for more momentum, but it seems like the bears are refusing to cede ground (at least for now). Shortly after recovering from a 20 percent price drop, the flagship coin lost a bit less than 1 percent of its value over the last 24 hours, according to CoinMarketCap data.

Cover image via u.today
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