Bitcoin (BTC) is going through its toughest week in which it tanked by 50% while the entire crypto market lost approximately $100 billion. Crypto investors have incurred massive losses with their wealth slashed dramatically in just a few days of this week.
Trouble in the crypto market begun on Sunday, March 8, with prices of major cryptocurrencies plunging significantly. The price decline was occasioned by a massive sell-off across the entire crypto market. The selling pressure was prompted by falling oil prices, coronavirus fears and global economic downturn. By end of day, the market had lost approximately $19 billion. The total market capitalization fell from $256.7 billion on Saturday to close at $237.7 billion on Sunday.
The top 3 cryptocurrencies accounted for much of these losses with Bitcoin, Ethereum and Ripple losing 6.7%, 5.1% and 3.4% respectively. Bitcoin begun the day trading at around $8,900 and closed at $8,300.
Since then, the crypto market appears to be on a free-fall with investors recording massive losses throughout the week.
The next three days, passed without many crazy price movements between Monday and Wednesday, at least by the crypto space standards. There were no wild price swings from March 9 to 11, with the market only experiencing the ordinary volatility synonymous with the crypto market. Nonetheless, a general downward trend persisted. These ‘small’ daily price declines slowly racked up resulting in about $15 billion losses over the three days. The total market capitalization fell from $237.7 billion to $222.3 billion as bitcoin price slid from around $8,300 to $7,800.
Meanwhile, the global financial markets were in turmoil with stock prices nosediving. Coronavirus fears and an oil price war sent investors into panic mode prompting a massive sell-off. The Dow Jones Industrial Average fell by 7.79% on Monday, its worst day performance since the 2008 financial crisis. S&P 500 also fell by 7.6% on Monday that became its worst day since Dec. 1 2008.
The poor performance in the global financial markets persisted over the next three days prompting multiple governments to inject additional liquidity in the markets to shield investors. On the other hand, crypto investors were optimistic that the market was on road to recovery, regarding the decline a market correction. After all, the selling pressure was cooling down.
All this while, the crypto market seemed unfazed by the economic situation and general market conditions. Financial analysts made comparisons between Bitcoin, stocks, gold, and other assets with many opining that the cryptocurrency was uncorrelated to other assets. The crypto community even championed the cryptocurrency as a safe haven.
However, bitcoin’s newly acquired status was short-lived. The, market was in limbo with investors watching developments on the coronavirus and global markets closely. It was, the calm before the storm.
All hell broke loose on Thursday, March 12, sending the crypto market into a frenzy. Soon after Trump’s announcement banning flights from Europe to prevent the spread of coronavirus, the market went into panic mode. There was a huge crypto sell-off after the speech causing the prices to plunge drastically.
Almost all top 10 cryptocurrencies lost around 30% of their value on Thursday with the losses accumulating further on Friday. Bitcoin had lost around 50% of its value for sometime as it traded below $4,000, a new yearly low.
The highlight of the week was on Thursday when nine out of the top 10 cryptocurrencies plunged drastically within one hour. Only Tether (USDT), a stablecoin, was spared. The top three virtual currencies Bitcoin, Ethereum, and XRP lost approximately 19%, 25% and 18% of their value in a few minutes.
The two-day decline was immensely disastrous for investors as cryptocurrencies lost about $100 billion of their total market capitalization.
Needless to say, not many still think that Bitcoin is a safe-haven asset. Not after witnessing this week’s capitulation.
After hitting the bottom on Friday, the crypto market has begun to show some signs of recovery on Saturday, March 14.
At the time of writing, bitcoin is recovering some of its value and is trading at around $5,300. Ethereum is trading at around $127 after hitting a bottom of $95 while XRP is at $0.15 up from its $0.11 bottom.
Several other top 100 cryptocurrency are up by at least 5% from their Friday bottom prices. The entire crypto market is up to around $153 billion from its bottom of $122, gaining approximately $31 billion over the past 24 hours.
Image courtesy of Pixabay
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