The price of Bitcoin crashed spectacularly from $7,400 to $5,200 within one hour. The result was the liquidation of a whopping $665 million worth of long contracts.
The fall makes it one of the steepest single-day falls in the history of the cryptocurrency. It fell below the much expected weekly 200-day exponential moving average (EMA).
The cause of the fall in Bitcoin Price?
Since early March, the cryptocurrency has been mirroring the U.S. stock exchange trend.
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Meanwhile, today, Thursday 12, the Dow Jones Industrial Average (DJIA) indicated an open 1,100 points. This made the crypto market to start showing signs of weakness.
As the Bitcoin price fell below $6,410 bottom, it made BTC crash to low support levels. Ultimately, the price fell to $5,200, the first time it crashed this low since November 2018.
In addition, many top cryptocurrency analysts blamed the crash on the current coronavirus pandemic. It is having a negative effect on the global economy.
Moreover, it is not the only cryptocurrency that is falling. Several other major cryptocurrencies are also falling. However, Bitcoin cash is losing about one-third of its value.
According to Simon Peters, a market analyst working with eToro, Bitcoin has fallen as cryptocurrencies are also sharing from the turmoil of traditional markets.
Although cryptocurrencies were seen as a safe haven in difficult times like this, most investors are now selling out to liquidate in case the spread of the virus becomes worse.
In a turbulent time as this, most investors may feel it’s safer to have cash or gold instead of a speculative cryptocurrency like Bitcoin.
The deadly virus that has been responsible for the continuous loss in the stock market has been declared a pandemic by the World Health Organization.
The recent price fall means that Bitcoin has lost over $50 billion of its net value since the beginning of March. Besides, this is one of the most severe crashes that Bitcoin has experienced. The notoriously volatile cryptocurrency traded close to $20,000 late in 2017.
