This week was destructive for bitcoin and it managed to set a new record for the 2020 year. Bitcoin’s price crashed 52% in just one day, which led to a drop from $7,500 to $3,750, hitting its lowest price since April 2019. In the next 24 hours, the price jumped up from $2,000 to $5,750.
However, bitcoin isn’t the only one affected. Other assets such as gold, silver and the US stock market have also faced a selloff.
Sudden crashes in the price of some of the most popular assets, led to a logical question: why did this happen?
What coronavirus has to do with it?
Some cryptocurrency analysts and traders consider that the Covid-19 coronavirus panic and fear is responsible for the recent bitcoin price crash. According to these statements, the whole global economy is heavily impacted by the coronavirus and these effects have reached digital assets as well.
It is considered that the coronavirus outbreak led to investors pushing major indexes into the bear territory. As a consequence market plunged 10% and caused Wall Street’s circuit breaker two times this week.
Furthermore, more price dropdowns are expected and likely to happen, since the global economy is struggling with the effects of coronavirus and panic it caused.
Bitcoin’s price crash leads to liquidations on BitMEX
Bitcoin’s price crash surprised crypto traders and exchanges. For example, BitMEX, a popular crypto exchange headquartered in Seychelles, faced with liquidations worth $702 million.
More precisely, the price drop led to $698 million worth of sell liquidations and $4 million worth of buy liquidations.
Bitcoin’s price crash impact on the overall crypto market
As bitcoin’s price crashed, the price of Ether, which is the second-largest cryptocurrency by market value, dropped 27.14%. Other altcoins are affected as well. In fact, every cryptocurrency holding its spot in the top-50 experienced a price drop. For example, Bitcoin Cash dropped 30.77%, while Tezos dropped 27.09%.
We are witnessing one of the biggest bitcoin’s price crashes. Bitcoin is a notoriously volatile cryptocurrency with price drops and growths that reached nearly $20,000 in 2017.
Still, the latest price drop is severe and caught us off guard. It also affected bitcoin’s overall value, with a loss of more than $50 billion since the start of the month.
Luckily, bitcoin fought back, and on Friday, its price reached above $5,000 to as high as $5,900.
What we can expect? Well, panic and fear surrounding current coronavirus outbreak aren’t the only factors threatening to bring changes to the cryptocurrency market.
To remind you, bitcoin halving is approaching slowly but surely. In fact, the next halving is expected to occur in May this year, in the week commencing 18 May. And it’s worth mentioning that bitcoin halving always brings along certain changes when it comes to bitcoin’s price.
So, where is this all going and how it will affect the crypto market? Honestly? We have no idea, but we’re hoping for better days.
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