Bitcoin price falls below 50,000 US dollars: The end of the rally fun?
The smoke is gradually clearing on the crypto market. After a huge sell-off, Bitcoin and Co. are licking their wounds. Has the market reached its temporary peak?
It was a bang for the buck. After a month-long upward trend, the Bitcoin price and with it the entire market were brought to their knees by a wave of selling during yesterday’s trading. In just 24 hours, the total market capitalisation plummeted by 200 billion US dollars. The ten largest cryptocurrencies are struggling with losses in the double-digit percentage range in the daily chart. After setting a Bitcoin Superstar new record high of 58,000 US dollars as recently as Sunday, the bitcoin price is falling with a 24-hour drop of 10.4 per cent to 50,412 US dollars at the time of going to press. Are the bears taking over the crypto market again?
Bitcoin price collapses
What happened in yesterday’s trading session on the crypto market may have caught investors on the wrong foot, but it was already in the offing. Since the bitcoin price left the 20,000 mark behind it in December, there have been no major corrections. While all altcoins have stormed from one record high to the next, the Bitcoin market capitalisation has broken through the magic 1 trillion US dollar mark.
At least this is how the market looked before the bloodbath. For the moment, the total value of all Bitcoin has slipped back below the symbol mark and all altcoins have briefly turned south. Ethereum (ETH) has fared even worse than Bitcoin with a 24-hour drop of 15.4 per cent, as has Binance Coin (BNB), which is down 15.9 percentage points on the day.
Crypto market cools
The across-the-board losses are the receipt for a long bull run in which there were hardly any breathers. With news like Tesla’s bitcoin entry, the market has gradually rolled over. In just one week, the bitcoin price gained US$10,000 before finally hitting a new all-time high on Sunday. Profit-taking was inevitable given the turbulent rollercoaster ride.
As the on-chain data platform Cryptoquant shares via Twitter, there were already massive inflows on all exchanges shortly before the crash. The rush briefly paralysed some trading venues. Binance had to „temporarily suspend withdrawals of ETH and Ethereum-based tokens due to high network congestion“. And Bitpanda, meanwhile, also apologised for „performance issues“ that caused „longer loading times than usual“.
A wake-up shot
As dramatic as the price losses may have been, the cut was necessary. Corrections are part of the market DNA, especially in the highly volatile crypto market. Bitcoin and Co. have received the long overdue cooling off that has allowed the market to consolidate to normal levels.
However, there are no signs of a trend reversal in view of the still bullish indicators. A large part of last week’s capital inflows from institutional investors has piled up at an average bitcoin price of 48,000 US dollars. It is unlikely that BTC will fall back below this strong support in the medium term.