Massive Bitcoin Short Order Triggers Another $20 Billion Correction for Cryptocurrencies
Cryptocurrencies shed another $20 billion in combined market value on Monday, less than 24 hours after posting a similar drop, after a single trader unloaded 20,000 bitcoin on Bitfinex.
In the span of roughly 16 hours, the total cryptocurrency market has fallen by roughly $20 billion, according to CoinMarketCap. Total coin values are now worth $308.5 billion, the lowest since June 21.
Crypto markets have now pulled back a whopping $78 billion from their yearly peak.
With the exception of Tether (USDT), a dollar-backed stablecoin that has seen its market cap swell in recent months, all of the top-20 coins were trading lower on Monday.
Bitcoin has been the primary catalyst for the reversal. The largest and most influential cryptocurrency is down more than 6% over the last 24 hours and is currently trading just above $10,600.
Several of the top coins have fallen below key levels amid the latest correction. Ethereum has lost the handle on $300 and is now trading in the sub-$290 range. Meanwhile, XRP is consolidating just below $0.4000.
Litecoin is back to trading below $120, having lost more than 7% over the 24-hour cycle.
Bitcoin’s sharp correction over the last 24 hours has had a cascading effect on the broader cryptocurrency market. According to at least one trader, a single user placed a 20,000 BTC short order on Bitfinex, the popular digital currency exchange.
— Crypto Loomdart (@loomdart) June 30, 2019
At 61% of the overall cryptocurrency market, bitcoin exerts a strong gravitational pull on altcoins and tokens. As a result, bitcoin’s renewed volatility has knocked tens of billions off altcoin values over the past five days. Of course, that followed a parabolic surge that drove the overall market to a high of $386 billion.
If a single sell order was responsible for bitcoin’s sharp correction, then investors can expect a swift recovery in the short term. Bitcoin whales, or oversized holders of the virtual currency, have been responsible for at least two major price reversals in recent months. Each time, markets bought the dip and drove the price to new yearly highs.
One of the more dramatic examples of a bitcoin whale dump occurred in mid-May when prices plunged by more than $1,000 in the span of a few hours. The selloff was caused by a single trader who unloaded 5,000 units of BTC on Bitstamp, a leading digital currency exchange. Read more: Crypto Markets are Surging Again after “Jackass” Whale Dump.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via CoinMarketCap.