Mid-week Crypto Flash Crash
Crypto markets tumbled with alt-coins selling off in a mid-week panic that saw the entire market shed nearly $30 billion in a matter of hours with Bitcoin itself losing more than 10% of its market cap over the past 24 hours at the time of this writing.
Even with a drop of 10%, Bitcoin remained relatively stable compared to most altcoins, which saw losses of between 10 and 20%, nearly across the board in the top 100 currencies.
The healthiest coins of the day? Stable coins. A host of stable coins, including the more established Tether and TrueUSD, but adding newer currencies such as USD Coin, DAI, and Paxos, have been acting as crash shelters for many as trading volume in Tether USDT, in particular, exceeds $4 billion today.
Bitcoin has reached its lowest point since October of last year; the early stages of the enormous bull run of 2017, and appears to show the possibility of a further drop as panic may be seizing the market. Many might attempt to catch falling knives over the next few hours, so it may take some time for volatility to settle.
In the meantime, Bitcoin Cash readies for a controversial fork that may see it split into two chains; Bitcoin ABC and Bitcoin SV. While traditionally, forks have caused traders to stock up on a coin in the hopes of making profits from the 1:1 split, the current bearish conditions and the uncertainty surrounding the possibilities of the upcoming fork have done little for the price of Bitcoin Cash leading into the fork.
While it’s possible the two events are related, it would be a stretch to point to any particular narrative for the sudden plunge in the market. Over the coming days, conditions may settle and a rebound, especially in altcoins, might help the market to stabilize again.
However, if the BCH fork remains contentious, it is possible that hash wars, 51% attacks, and market dumping by major holders, or “whales”, such as Craig Wright, could cause a degree of volatility in the markets that has not been seen in quite some time.