Thursday, March 12, a disaster day for crypto traders and investors, many people still think they're dreaming. Bitcoin has witnessed a historic slide – losing nearly $ 2,000 in less than 30 minutes, a move “too fast too dangerous”.
According to data from datamish.com, the result of this strong decline has caused $ 665 million worth of Long contracts on cryptocurrency derivatives exchange BitMEX to be liquidated in 1 hour, wiping out many traders. In the market, the total amount of money in Long contracts is still not available, because besides BitMEX, there are still many other large derivative platforms such as OKEx, Huobi or Binance.
What triggered this decline in Bitcoin prices?
Bitcoin price has been closely reflecting the trend of the US stock market since the beginning of March.
When the Dow Jones (DOW) fell 1,500 points right after opening trading on March 12, the cryptocurrency market also began to show signs of weakness.
The sudden drop below the bottom of $ 6,410 has sent BTC to a lower support level, eventually reaching a low of as much as $ 5,200 since November 2018.
Bitcoin has never dealt with a sell-off in global markets, and how the price of it will rise during the turbulent financial markets is unclear.
Some industry leaders have denied seeing Bitcoin as a fully-fledged asset, but many describe it as a risk-off that lacks correlation with the stock market.
However, the significant pullback of Bitcoin over the past five days has proven that at this point, BTC is closer to a risky asset than a safe haven.
What will happen next?
Altcoins like Ethereum have plummeted by up to 30% on the day, when tens of billions of dollars have evaporated from the cryptocurrency market in just a few hours.
If BTC follows the same trend as the end of 2018, the cryptocurrency market could enter the accumulation period, building momentum to look forward to the end of this year.
While historical data can be used to forecast BTC's long-term price trends, in the short term, Bitcoin and the rest of the crypto market are in an unprecedented territory.
When analysts are uncertain about whether the stock market will find a bottom in the near future, and where the bottom will be amid growing fears of the corona virus pandemic, predicting the future of the cryptocurrency market at this time is not certain.
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According to CryptoSlate
Translated by ToiYeuBitcoin