Cryptocurrency Crash. Bitcoin fell by 40% to 42. USD

Bitcoin and the company have again reminded investors and speculators of their nature and the possibility of making very sharp price adjustments when they least expect it. The price of the most popular cryptocurrency fell by nearly 40 percent., up to approx. 42 thousand dollars.

The current cryptocurrency crash looks to be the worst since May, and only a handful of cryptocurrency projects have managed to withstand it and end the weekend without huge drops.

There was already a greater discount

Recall that in May, bitcoin and other cryptocurrencies began to decline rapidly when Tesla has given up accepting payments in BTC, and China has started dismantling the entire crypto ecosystem in its country. As a consequence, bitcoin could drop from April to June from 64. up to 29 thousand USD, creating a huge, more than 50% correction. The capitalization of the entire crypto market then fell from $ 2,5 trillion to $ 1,3 trillion.

How is it today? BTC / USD exchange rate after the fall in May, it rose and marked a historic peak of nearly 69 USD to drop to approx. 42 thousand this weekend. USD. The correction was therefore less than 40 percent. On the other hand, the capitalization of the entire market fell from USD 2,9 trillion to USD 2,2 trillion. Despite such a sharp retreat, the market is therefore slightly below its April / May 2020 size.

It is also worth noting that Ethereum begins to collect an increasing share of the cryptocurrency market. Currently, it is 21 percent, with BTC dominating at 40 percent. Last time 21 percent ETH had a share in the cryptocurrency market in 2017. Thus, the ETH / USD exchange rate recorded a smaller correction than BTC, falling by 26 percent. from the peak at $ 4800.

What could have triggered the weekend crash?

The exchanges offering leveraged instruments and derivatives on cryptocurrencies received capital of 34 thousand zlotys in two days. bitcoins. It was the largest influx since the summer holidays. This, in turn, could have been used as a hedge for a highly leveraged bet in the derivatives market that could break a lot of pending orders or stop lossesas well as throw out those who play on the increases from the market by the necessity to close these positions due to the lack of capital to pay in the margin.

Given the low liquidity of the market from Friday to Saturday and the lack of mechanisms to stop trading during turbulence, as on classic exchanges, this could cause turmoil and panic for cryptocurrency holders.

It seems that no information similar to that of May this year has appeared. Then the market picked up quite quickly after a huge decline.