Bitcoin and the cryptocurrency market have experienced the largest crash in 24 hours in history

Yesterday there was the largest Bitcoin crash in the history of cryptocurrency in dollar terms. Shortly after setting a new all-time high of $ 58,640, the coin dropped to nearly $ 47,700.

Then, in a matter of minutes, the chart bounced to the $ 53,000 mark, but it went lower this morning. In addition to this, the capitalization of Bitcoin fell below a trillion dollars. Let’s talk about the situation in more detail and at the same time remember the altcoins, which are now having a hard time.

To begin with, we note that the collapse became the largest in terms of dollar terms, not percentage. Yet before that, we have already seen 20-30 percent drawdowns in Bitcoin and other cryptocurrencies – the last time this happened in March 2020. Then, amid worries about the coronavirus pandemic, the markets experienced a collapse, and this also applies to the stock market.

Despite this, the fall has noticeably affected both the senses of traders and the state of altcoins. For example, Ethereum managed to collapse to $ 1,574, although yesterday it was estimated at $ 1,894.

Ethereum chart rate

Ethereum price chart per day

Litecoin LTC managed to test the level of $ 184, although a day ago it was estimated at $ 223.

litecoin ltk rate

Litecoin price chart per day

Chainlink LINK cryptocurrency dropped to $ 26. Yesterday it was given a little less than $ 33.

link chart rate

Chainlink price chart per day

Cardano ADA behaved differently. During the day, it slipped by 5.5 percent: from 1.06 to the current 0.98 dollars. At the same time, over the last day, she managed to test the level of $ 1.13 – which is not so far from the historical maximum of the ADA rate of $ 1.18.

cardano rate price

Cardano price chart per day

Finally, the Polkadot DOT plummeted from $ 38 to bottom $ 31.

In general, according to the state of the top ten cryptocurrencies, it is clear how serious the current correction is – that is, a collapse. In addition, you can see from the charts that it has not yet ended.

Why Bitcoin fell

The previous largest daily drop in Bitcoin occurred just a month ago – on January 11. After breaking the line of 40 thousand dollars – which was then the maximum for the cryptocurrency – the asset fell to 32 thousand dollars before there, how to recover, continue to grow and reach new historical records.

Such a sharp drop could come as a shock to some traders – especially considering that several billion dollars worth of long positions were liquidated yesterday as a result of the fall in prices. However, this is not a surprise to those who have been following the industry and trading cryptocurrency assets for several years now. As we know, Bitcoin is prone to significant corrections during the growth stages , so you should not be surprised at what is happening. As well as claiming that the run of the cryptocurrency is over.

Bitcoin cryptocurrency blockchain chart

Now Bitcoin is balancing around 50 thousand dollars and periodically goes below

During the 2017 growth phase, Bitcoin reached a record price level at that time – almost 20 thousand dollars. The massive growth lasted throughout the year, during which the cryptocurrency went through corrections several times, on average losing 20-30 percent of its value on each of these pullbacks.

For example, from November 9 to 13, 2017, BTC fell 28 percent from about $ 7,400 to $ 5,900 . In the summer of 2017, the price of Bitcoin even fell by as much as 40 percent .

bitcoin chart rate

Chart of major drops in Bitcoin in 2017

And here it is important to remember that any collapse on a bullish trend should be perceived by investors as a profitable opportunity to buy a digital asset at a lower price – after all, after the falls, it goes up. At least, Quantum Economics analyst Jason Dean is sure of this, as quoted by Decrypt.

Such a fall in the market is exactly what the doctor ordered. When the correction is over, we will feel relieved, energized, and ready for another wave of growth.

Other experts also do not see a problem in what is happening, although they recognize the complexity of the situation morally. Here is a quote from Raoul Paul, who stopped working at the age of 36 and put 75 percent of his fortune in Bitcoin.

Am I the only one feeling relieved when the BTC sale starts? You know they should be, but when they finally happen, you can switch to buyout mode.

That is, the investor claims that the situation is normal. Moreover, such a collapse could have been foreseen in advance – at least in relation to the fact that it should occur.

Alas, US Treasury Secretary Janet Yellen does not share the enthusiasm for the first cryptocurrency. Speaking to journalist Andrew Ross Sorkin last night, she confirmed that she is not a Bitcoin fan. Here is a quote from her.

I don’t think Bitcoin is widely used as a transaction mechanism. I’m afraid in this case it is often used for illegal financing.

That is, she again used the old argument that cryptocurrencies are suitable and are used only for illegal transactions. At the same time, Janet overlooks the fact that coins allow value to be sent anywhere in the world for relatively little money compared to banks. In addition, it is worth noting here that financier Michael Burry predicted similar attacks on Bitcoin by the US government the day before. More information about his point of view can be found in a separate article.

We believe that you should not be intimidated by short-term crashes in BTC and the coin market in general. They will repeat themselves in the future on the way to the historically important Bitcoin price milestone of $ 100,000 and above. Until it is taken, investors have time to accumulate as many bitcoins as possible on their addresses in order to extract the maximum profit from their growth.

It is also important not to forget that during periods of large price spikes, you need to be very careful about preserving capital. In such situations, it is better not to trade with leverage if you do not fully understand the dynamics of the market. Otherwise, it will most likely end in liquidation and loss of money.

Many traders choose the strategy of sitting out such periods in stablecoins, that is, coins that are pegged to the dollar. You won’t be able to make money in such a situation, but there will be no losses either.

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