Though the market has had a pretty good year until now, things are starting to look bad. Though as we reported here on Crypto Mute that the top asset, Bitcoin has recorded a gain of more than 110% since last Christmas, the asset could wipe out these gains over the next few days. In the last few hours, the asset has slipped below a crucial support position of $7K. Its drop has seen other coins follow suit and the entire market has wiped out more than $10 billion in the last 24 hours.
At the time of writing this, Bitcoin is trading for $6,675. The bulls will look to defend the $6,500 with clear trouble being indicated if this does not hold. Further down the rabbit hole, Bitcoin will test the $6K support which is the more crucial support for bulls. Back in 2018, when this support did not hold, we saw prices fall to bottom at $3,100. To avoid the same carnage, the bulls will need to fight off the bears over the next few hours and defend the $6,500 support and if this battle is lost, regroup for the $6K position.
Altcoins have also fallen by the same sword, all top ten cryptocurrencies have shed at least 5% from the last 24 hours. Ethereum and XRP, the altcoin leaders have lost more than 9%. Other coins like Tron, NEO, EOS and Cardano ADA are recording losses in double digits.
What Has Triggered The Crypto Market Bloodbath?
Bitcoin has clearly triggered the latest bloodbath but it is unclear why. One of the more popular reasons is a massive liquidation on BitMEX. Data shows that $43.5 million contracts were liquidated over the last 24 hours. Of this, around 2.5 million in short positions. So while possible, it would seem a lot of people were expecting Bitcoin to climb higher than $7K and not fall below.
Another popular theory is that investors are panicking following the report from Chainalysis. The report shows that the Chinese Ponzi scheme PlusToken still holds 20,000 BTC and 790,000 ETH. This means that they could still dump this tokens and flood the market.
The low volumes in the crypto market have not helped the case. It means that the bulls do not have great support to hold up prices and push prices up.
Regardless of the trigger, holders are hoping that the crypto market can get a grip and stop leaking.