The crypto market showed little movement and extremely low volatility over the past days and weeks. All the more surprising is the sudden drop in Bitcoin’s price and almost the entire Altcoin market.
Some studies have shown that the volatility of the Crypto market has reached its lowest value in the history of digital currencies. Total market capitalization has moved just around the 220 billion dollar mark in a seemingly deadlocked channel over the last three weeks.
Within the last few hours, however, almost 10 billion dollars have flowed out of the market. Around 02:30 tonight, the prices of all crypto currencies fell and recorded an average price drop of between 5 and 10 percent.
Bitcoin’s price has fallen by more than 5 percent. The market leader was able to maintain the support level along the $6,500 mark for a long time. The rest of the market was also affected, with Ethereum losing 9 percent and falling to its lowest level since July 2017. XRP and IOTA also fell by nearly 10 percent, following the downward spiral.
This pattern has been repeated many times in recent weeks, so this price slide is sudden, but should not be overvalued. The trading volume has been extremely low lately and it seemed that the crypto market has calmed down and stabilised at a level from which a new rally can start.
Large sellouts are currently taking place in the Asian markets of South Korea and Japan, but it is too early to identify a clear reason for the current course there. Many industry experts are trying to forecast the next possible course, but there is great disagreement as to whether the bottom has already been reached.
The next hours and days will show in which direction the journey goes.
One of the best explanations of this sudden dive is given on Reddit, by this Redditor:
US stock market had a hell of a bad day today. Maybe correlated? I feel like all of us cryptofans think that when/if “the old financial system” falls apart, crypto will shine. I would not be surprised if a (stock) market crash causes crypto market to crash right along with it.
We all think crypto is the way of the future, but I think we need to be realistic and realize that most of the money in crypto is people’s “play money” and they’re going to be needing it back if we get another recession/depression.