The cryptocurrency dropped at a staggering rate wiping 600 billion dollars in a week. Every major coin including Bitcoin, Ethereum, and Dogecoin was trading as low as $30,681.50, $2,375.65, and $0.2183 respectively.
The sudden market crash resulted in a huge quantity of paper handselling and every coin fell up to 20 percent and to 50 percent in some cases, which led investors to lose millions for the least.
Prices of almost all coin are red and dropping portraying a bloodbath and it is not surprising considering the volatility of the Cryptocurrency market.
Major exchanges like Coinbase and WazirX are down amid the massive plunge in Cryptocurrency.
“A nearly 40 percent dip in the bitcoin price from its all-time high looks dramatic but is normal in many volatile markets, including crypto, especially after such a large rally. Such corrections are mainly due to short-term traders taking profits. Long-term value investors might call these lower prices a buying opportunity, as MicroStrategy just did,” Avinash Shekhar, Co-CEO of ZebPay said.
“Technical analysts would call this a test of the support level around $40,000. Neither type of investor would say that tweets are the underlying cause. Investors should invest in education first. Research the underlying value of Bitcoin, Ethereum, and other crypto assets as you might look at a company’s information before buying stocks. Use strategies like rupee cost averaging and SIPs to more confidently maneuver through volatility and take a long-term view,” he added.
The market crash started when China announced a crackdown on Cryptocurrency and its trading in China by directing banks and online payment firms to deny services to any client which involves Cryptocurrencies.
The Chinese regulations on Cryptocurrencies were made in a joint statement from the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China, and posted by the People’s Bank of China (PBOC).
The new regulations make it more difficult for Chinese traders and investors to buy cryptocurrencies and even it makes it harder for Miners to exchange any coin for the Chinese Yuan, which would affect their Mining business.
“For those new to bitcoin, it is customary for the People’s Bank of China to ban bitcoin at least once in a bull cycle.”, said Hong Kong’s Bitcoin Association in response to China’s ban on the virtual currency.
Meanwhile, Tesla’s announcement to discontinue Bitcoin as a payment method, already dropped the price of bitcoin by over 10000$ this week prior to this incident.