Investing.com – The crypto market has been in a party mood for weeks and almost seems invulnerable. But on Tuesday that suddenly changed. rushed down by up to 15 percent within a few minutes and tested its exponential 20-week line at $ 43,135, which is relevant for the overall trend and which had already served as a springboard for higher prices several times in the past.
In an exclusive comment to Investing.com, Alexander Voigt, founder and CEO of daytradingz.com, stated that today’s flash crash in the cryptocurrency market should be understood as “normal consolidation in a volatile market”.
“We have seen similar consolidation patterns about 10 times this year. What stands out today, however, is that the trading volume is relatively low. This suggests that traders did not have as many supportive buy orders in the market after the long weekend, so.” that even relatively small sell orders could crash the market. The market is expected to consolidate around $ 47,000 in a range of $ 5,000 for a few days before deciding which direction to go. “
By 7:32 p.m. it had already made up for more than a third of its losses and was last just under $ 4,000 above its correction low of $ 46,830.
The fall in the price of Bitcoin also caused turbulence on the Altcoin market. High flyers like and slipped by up to 25 percent within a few minutes before they could make up some of their losses. (More on this, and).
A similar picture emerged when looking at the chart of , , and . Only was able to hold up among the top 10 cryptocurrencies.
Crypto quant Benjamin Cowen commented on the day on the crypto market with the words: “A completely normal day in the crypto universe.”
Cryptocurrencies are known for their high volatility because the amount of money in this market is so small compared to the stock or commodity market. While Bitcoin still reached a record high of $ 64,700 in mid-April, the most important crypto currency in terms of market capitalization was more than $ 30,000 lower two months later. After a brief consolidation, the BTC bulls came back to life and pushed the cyber currency back to the $ 50,000 mark.
Were crypto whales responsible for the bitcoin flash crash?
It is still unclear what triggered the dynamic sell-off. On Twitter, so-called Bitcoin whales are blamed for the flash crash, which with their investments dominate the relatively young crypto market at will.
Supporter of this theory is Scott Melker, who is active on Twitter under the pseudonym The Wolf Of All Streets. At the same time, it draws a connection to El Salvador, where Bitcoin has been an official means of payment since today.
“I’m not a fan of conspiracy theories, but an aggressive sell-off on the day El Salvador recognized #Bitcoin as legal tender while the World Bank and others have already expressed disapproval of the decision is probably not purely coincidental.”
The World Bank had previously announced that it would not support El Salvador with its Bitcoin plans. The institutes named environmental and transparency deficiencies in the cryptocurrency as the reason.
The International Monetary Fund (IMF) also explicitly opposed Bitcoin as an official means of payment in August, without mentioning El Salvador.
“As a national currency, cryptocurrencies – including Bitcoin – are associated with a considerable risk for macro-financial stability, financial integrity, consumer protection and the environment,” said a blog entry by the IMF.
El Salvador’s President Nayib Bukele thanked in any case at the IMF for the price slump in Bitcoin, probably alluding to Melker’s theory that various institutions sent Bitcoin downhill in a coordinated action to put El Salvador in its place.
“Thanks for the dip @IMFNews. That saved us a million on printed paper.
El Salvador now owns 550 Bitcoin. “
According to Bukele, El Salvador has the most recent bitcoin dip 150 bitcoins collected, which probably also contributed to the stabilization of the crypto markets.
El Salvador was the first country to recognize Bitcoin as an official currency today. According to the country’s president, this move should improve the lives and future of many people. Politicians and the mainstream media have been storming this decision for months, possibly also because they recognize that the era of fiat currencies is slowly but surely heading towards its end. This is the only way to explain that this and that have lost more than 80 percent of their value to Bitcoin since 2020.