What Made the Crypto Market Lose $17 Billion In a Single Day?

What Made the Crypto Market Lose $17 Billion In a Single Day?
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What has happened today was expected but the ferocity of the events that transpired during this trading session has surprised even the most prepared analyst in the cryptocurrency industry. As the recent bull run came to an end, many of us expected an inevitable market correction that would bring the price of all of the major cryptocurrencies down. The correction was so severe that over $17 billion was abruptly dumped out of crypto markets.

Cryptocurrencies have shown no reduction in their volatility and this trait has caused another massive blow to the market this year. Cryptocurrencies began correcting their prices at 1400 UTC and the result was the largest single-day dump of the year. From 2019’s all-time high of $144 billion, the market capitalization dropped to $127 billion within a few hours. Bitcoin price alone dropped by about 11% during this session.

Bitcoin price history of last six days.

Many experts and analysts currently scramble to find explanations for what could have been the reason that such a revered market made the same mistakes that were made in January 2019. Similar pattern during the very starting days of 2019 followed: the whole market went into a bull run and on January 10th, the corrections kicked in and about $10 billion was taken out of the market within a matter of hours. Even with this incident fresh in our minds, no analyst was able to predict a dump of this magnitude.

Comparison of crypto market’s actions in 2014 and 2019.

According to Murad Mahmoudov, renowned crypto market analyst, the market is following the same path as it was back in 2014. Murad Mahmoudov shared two BITSTAMP timeframes, one of them was of 2019 and the other one of 2014. The signals on both these charts are astonishingly similar with only one difference: the magnitude of every action from the 2019’s BITSTAMP is 10 times the same actions from the 2014’s BITSTAMP.

Alex Kruger, another prominent crypto analyst had the same insight about this incident. According to Alex, the massive dump would have been a simple correction if fear wasn’t involved. The top cryptocurrencies kept on rising for 16 days straight without any major downtrend or stabilization. For instance, ETH Price rose 38% without any serious pullback.

According to Alex, a correction was inevitable but if the amateurs – and possibly even experienced cryptocurrency investors – hadn’t backed down due to fear, the dump wouldn’t have been so massive. This has become a common rant among many experts and might even have some truth to it.

As described by Reddit Chairman Alex Ohanian, the great hype and attention to the crypto market in 2017 had caused the markets to grow unstable and prevented the industry from moving forward. In his interview with Yahoo Finance, Ohanian explained how the decreasing popularity of cryptocurrencies is resulting in loss of interest among many individuals, leaving only the enthusiasts in the crypto markets. According to Ohanian, this will help the industry grow at a more stabilized rate. Would it actually happen, or is this the real reason why the crypto market lost over 12% of its capitalization in a single correction? Time will tell.

About Ahmed Humayun

Ahmed is a medical doctor by profession but his love for the tech has landed him on one of the leading tech/crypto website. He has a vast experience in tech industry and spends most of his free time reading and writing about the crypto world. He can be reached by e-mail on ahmed@insidebitcoins.com