The price of Bitcoin nosedived by 39% to as low as $4,185 — its lowest point since April 2019 – in less than 24 hours. Other cryptocurrencies like ETH, EOS, and BNB are faring even worse.
It all started with the traditional markets. The Dow Jones Industrial Average has dropped by 10 percent while S&P 500 dipped by 9.5 percent. The Nasdaq, which comprises more tech companies, also dropped by 9.42 percent.
As for the Australian and Asian markets, their market descent is not as bad but still fairly high. The Australian ASX All Ordinaries dipped 7.23 percent as Tokyo’s Nikkei 225 dropped 4.4 percent. And with the coronavirus still spreading, it may be possible that the worst is yet to come.
While most crypto proponents believed Bitcoin to be a safe haven as traditional markets have dipped significantly, the digital currency appears to have emulated them instead. In addition, more than half the crypto assets market has been wiped out when it fell from $223 billion to $118 billion.
Ethereum is down by 42% while Binance Coin seems to have dumped the most among the top 10, at 47.5%. EOS is not looking good either, having dropped to 41%.
Bitcoin already starting to bounce back
Bitcoin seems to have bounced back to the $5200 region although it’s uncertain how long it can maintain that level of support.
Despite this dire situation, many high profile market participants are optimistic about BTC long-term. BCB Group CEO Oliver von Landsberg-Sadie believes that this price won’t last long due to the forthcoming Bitcoin halving which will take effect in about two months from now.
“The market is oversold on correlated global economic jitters and it’s not hard to see a short term correction,” says the CEO of the institutional crypto broker company as he claims to have bought more cryptocurrencies despite the crash.
Landsberg-Sadie isn’t the only notable investor who is taking advantage of these “discount prices.” Asim Ahmad, a founding partner of Eterna Capital wants to wait out this bloodbath in order to make huge profits.
“In the long-term, we see this period as an opportunity for many investors to get exposure to the asset class at attractive prices,” he said.
What caused the crypto market to hemorrhage?
It’s hard to pinpoint with certainty what could have triggered this market turmoil, but the recent pandemic is too coincidental to ignore. The coronavirus had triggered a sellout in the traditional markets as expected, and it may be the primary driver of the crypto bloodbath as well.
Even as the U.S. Federal Reserve vowed to inject $1.5 trillion in short-term lending markets today, the decline still continues. The digital currency space, on the other hand, does not have such “remedies”. Only retail traders and some institutional investors keep this market alive.
As of now, it is uncertain which direction Bitcoin and the other altcoins will go as BTC hovers above $5000.