After the flash crash on Tuesday afternoon, the deep red signs clearly dominate the crypto market on Wednesday morning as well. Bitcoin is trading around 14 percent weaker at around $ 45,000 on a 24-hour basis. Some large altcoins even lose more than 20 percent.
A few hours before a law came into force in El Salvador on Tuesday that gave Bitcoin legal tender status for the first time, the crypto market collapsed within minutes. Bitcoin briefly slumped to the $ 43,000 range, but from there quickly started a rebound to $ 47,500 (THE SHAREHOLDER reported).
In the meantime, however, the bulls seem to be running out of breath, because on Wednesday morning the Bitcoin staggered again towards $ 45,000 and the important chart marks that are there. In addition to the horizontal support in this area, this is above all the 200-day line, which it now threatens to fall below in the long term.
Even a concerted buying campaign, for which numerous Bitcoin fans all over the world had arranged to meet via Reddit and Twitter to celebrate “Bitcoin Day” in El Salvador, fizzled out in the night without any effect.
Chain reaction through extreme lever positions
Meanwhile, the search for the causes of the sudden price collapse is ongoing. Industry experts say that extreme leverage positions are partly responsible for this. According to information from the portal CoinDiffer positions in the derivatives market with a volume of $ 3.54 billion were liquidated. It wouldn’t be the first time that the implosion of heavily leveraged positions turned a normal correction into a flash crash.
Amount of Liquidations in the past 24 hours by exchanges in total $ 3.54 was liquidated!
– CryptoDiffer (@CryptoDiffer) September 7, 2021
Altcoins deep in the red – market cap sinks to two trillion dollars
The severe setback does not only affect Bitcoin, but has cost the entire crypto market almost $ 400 billion in market cap. There is not a single winner among the 20 largest digital currencies on Wednesday morning; instead, losses in the double-digit percentage range are more the rule than the exception.
It hits particularly hard XRP, Binance Coin and Uniswap, which lose more than 20 percent over a 24-hour period. With most coins, the partly significant price gains of the past week have now been consumed.
Note on conflict of interests:
The chairman of the board and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions on the following financial instruments referred to in the publication or related derivatives that benefit from any price development resulting from the publication: Bitcoin, Ethereum.
Author Nikolas Kessler has taken direct and indirect positions on the following financial instruments mentioned in the publication or related derivatives that benefit from any price development resulting from the publication: Bitcoin.
Shares or derivatives that are discussed / mentioned in this article are in the “SHAREHOLDER Depot” of THE SHAREHOLDER.