A flash Bitcoin crash is taking hold of the cryptocurrency market. In fact, the wider crypto market is now nearly completely in the red. This comes after weeks of bullish momentum. Moreover, traditional markets have fallen two days in a row as worries mount regarding the coronavirus’ continuing spread.
Flash Bitcoin crash obliterates recent crypto gains
At the time of writing, Bitcoin is trading at below $8,700. This represents a massive intraday fall of over 7%. Furthermore, it breaks the bullish streak that Bitcoin has seen for the past few weeks. Although the price of Bitcoin is prone to fluctuate, this flash Bitcoin crash is likely too major to ignore.
As the following chart from COIN360 depicts, the cryptocurrency market as a whole is now blood red. This sudden crypto crash is currently obliterating recent market gains, and plunging back to levels seen in January. Ethereum and Ripple, for example, have both fallen roughly 10%.
However, it is unclear whether this market correction holds merit or is simply the result of an overreaction. For example, the stock market fell massively both yesterday and the day before.
The stock market has had its worst two days in recent history
In fact, analysts note that this is the “worst 2-day slide” for the stock market in four years. In total, the last two days have sunk the Dow by roughly 6.59%. Consequently, a Bitcoin crash of six to seven percent is – although major – in line with the traditional stock market’s performance.
Nevertheless, Bitcoin is often immune to the intraday fluctuations of the traditional stock market. The premier cryptocurrency, which many investors refer to as “digital gold”, is normally a safe haven for market fluctuations. In this case, however, it seems coronavirus (covid-19) fears have spread to the crypto market.
This is likely why the current flash Bitcoin crash is spooking investors. This, in turn, could cause them to pull out of the market “ahead” of the fall, which only exacerbates it. It will, therefore, be extremely interesting to watch the cryptocurrency market in the coming minutes and hours.
A golden buy-in opportunity or a warning of what’s to come?
If this market plunge is merely the result of an over-correction, it could provide a golden buy-in opportunity. However, if it is the beginning of a larger consolidation after the past months’ gains, it could get much worse.
One should keep in mind that crypto analysts largely agree that the upcoming Bitcoin halving will drive prices higher. However, analysts are sometimes wrong, and it is possible – although unlikely – the recent bullish signals were all wrong.
At the time of publishing, however, the price of Bitcoin is recovering somewhat from its low during the sudden crash. Bitcoin is now trading at $8,736 – representing an intraday loss of 6.37%.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.