Bitcoin crashed about 14 per cent from its recent highs, holding around $45,000 level from $51,500 in the previous day.
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New Delhi: The cryptocurrency market was under immense pressure on Wednesday as all top digital tokens crashed by as much as 25 per cent in just a day. Numero uno digital currency Bitcoin crashed about 14 per cent from its recent highs, holding around $45,000 level from $51,500 in the previous day.
On Tuesday, El Salvador became the first country in the world to accept Bitcoin as legal tender, despite widespread domestic skepticism and international warnings of risks for consumers.
According to experts, the market was expecting the fall anytime soon after the recent rally. Cynicism over glitched rollout in El Salvador might just be an excuse.
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This volatility and profit taking was expected after a strong bull run from the lows, but the magnitude is very much violent, said Ishan Arora, Partner, Tykhe Block Ventures. “Not many altcoins could hold it well,” he added.
Similarly, its counterpart Ethereum plunged 16 per cent, slipping below $3,300 level. Polkadot, Chainlink and XRP (Ripple) crashed the most, eroding over 26 per cent of investors’ wealth in just 24 hours.
Cardano, Binance Coin, Solana, Dogecoin, Uniswap and Litcoin were the other top tokens which shed between 15-20 per cent. Among the pack of top 100 tokens, Theta lost almost one third or 32 per cent of its value.
According to the data from coinmarketcap.com, the traded volume of the crypto market in the last 24 hours has gained over 67 per cent to $241.64 billion. This is about 12 per cent of the total global crypto market cap, which is just about $2 trillion mark.
“We don’t see any fundamental reasons tied up with this drop, but one possible reason could be the mass liquidation of Bitcoin longs which resulted in a massive drop within a few minutes,” said Hitesh Malviya, founder, itsblockchain.com.
The US Securities and Exchange Commission (SEC) has threatened to sue Coinbase Global Inc if the crypto exchange goes ahead with its plans to launch a programme allowing users to earn interest by lending crypto assets.
After this bloodbath in the crypto market, investors are on their feet as they are anticipating a déjà vu, just like May this year. However, market experts have a different opinion on this.
Arora from Tykhe Block Ventures said that he expects Bitcoin to hold $40,000 level, which is likely to cap the downfall. “Altcoins may bounce back much stronger when Bitcoin recovers as they have shown good strength.”
On the other hand, Malviya has a different opinion and he did not rule out the possibility of Bitcoin retesting its recent lows at $30,000.
“The chances for such a bearish scenario are minimal, but not out of the question,” he said. “However, Bitcoin will stay in the bull market as long the price stays above $43,000 on the daily timeframe,” he added.
Despite mixed opinions, market experts are suggesting investors to buy Bitcoin and other cryptocurrencies at lower valuations. “This is a good buy-the-dip opportunity and should not be missed,” said Arora.
However, one should not hurry and invest the entire capital at one go. “Bitcoin is a steal below $40,000 for a long-term position and one should not miss the bus this time,” Malviya said.