Bitcoin plummeted -29.71% overnight from yesterday’s high of $7967 to a low of $5600 in an epic sell off. The leading crypto has stabilized for the moment at $6065, but we may see further downside price movement as investors panic and a global recession looms.
Crypto Market Sees Catastrophic Losses
Bitcoin has had an apocalyptic sell off in the last 24 hours, while investors in many of the world’s financial markets are panic selling everything as fear and uncertainty from the impact of Coronavirus shakes the world financial markets. Even the safe haven investment of gold is down.
Bitcoin shed $22 billion overnight as investors pulled $68 billion from the crypto markets. In one hour Bitcoin had fallen by 17%. Let’s take a look at 3 major reasons for why the crash happened.
1. Traditional Markets Experience Worst Day Since 2008
Traditional markets are a trainwreck, the Dow Jones and S&P 500 have lost trillions in value in the last week. Bonds are tanking, as the yield curve risks going inverse. Goldman Sachs has declared the bull market over, and Oil has been plummeting due to a price war between Russia and OPEC.
Much of the fear and uncertainty surrounding the impact of Coronavirus on traditional markets has caused a sell off in riskier assets like Bitcoin as traders cover margin calls. The Fed has been increasing repo market operations to the tune of $175 billion per day to provide liquidity. President Trump has called for a huge stimulus plan to reassure the tumbling markets. Wall St. may shut down over fears of infection. We have a black swan impacting every aspect of the economy.
2. Bitcoin Market Cap Drops 50%
Bitcoin lost half its market cap since yesterday. Bitcoin’s market cap was $260 billion yesterday, and today its market cap sits at $110,780,057,889. This is a reduction in market cap of -57.69%. The rest of the crypto markets have fared much worse.
As the flash crash took place altcoin investors saw altcoins fall at an even more accelerated pace than Bitcoin. This caused many investors to flee to Bitcoin pushing Bitcoin dominance 65.3%. Every single coin on the first page of coinmarketcap is in the red at the moment. Other top coins have lost more than Bitcoin. Bitcoin Cash, Bitcoin SV, Ethereum, Binance, Tezos, Link, and many other leading altcoins lost 20-30% in the crash as well.
3. PlusToken Scammers Triggered the Crypto Selling Frenzy
The Plus Token scammers started dumping 13,000 Bitcoin which sparked the initial sell off. We reported on a huge movement of coins from wallets known to be connected to the Plus Token scam over the weekend.
The Plus Token wallets have been dumping around 12,000 Bitcoin per month, and each time they start selling they crash the price of the market. This latest round of Plus Token Bitcoin sales just happened to coincide with the coronavirus black swan event which has been wreaking havoc across the entire global economy. The virus is causing manufacturing in China to run at half capacity and is provoking fears of supply chain disruptions, as well as a global recession. The worst part is that the plus token scammers still have over 60,000 BTC to get rid off, according to blockchain data tracking the wallets containing the stolen funds.
What do you think was the biggest cause for today’s crypto market crash? Let us know in the comments!
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Source: Bitcoinist News