What are the reasons for today’s crypto market crash? Well, folks, the price of Bitcoin declined -29.71% overnight from yesterday’s high of $7967 to a low of $5600 in a massive sell-off. At the moment, however, the flagship cryptocurrency has stabilized at the $6065 level. Should traders expect a further downside price movement as investors panic and a global recession looms?
March 12, 2020 | AtoZ Markets – Bitcoin has had an apocalyptic sell-off in the last 24 hours, while investors in many of the world’s financial markets are panic selling everything as fear and uncertainty from the impact of Coronavirus shakes the world financial markets. Even the safe haven investment of gold is down.
3 reasons why the crypto market crashed today
Bitcoin shed $22 billion overnight as investors pulled $68 billion from the crypto markets. In one hour Bitcoin had fallen by 17%. Let’s take a look at 3 major reasons for why the crash happened.
1. Stock market suffer historic losses
Stocks continued their plunge on Thursday as the Dow Jones and S&P 500 lost trillions in value in the last week. With a drop of more than 9 percent, the S&P 500 entered a bear market. For the Dow Jones industrial average, the drop of 10 percent was also its worst since the 1987 stock market crash.
Much of the fear and uncertainty surrounding the impact of Coronavirus on traditional markets has caused a sell-off in riskier assets like Bitcoin as traders cover margin calls. The Fed has been increasing repo market operations to the tune of $175 billion per day to provide liquidity. President Trump has called for a huge stimulus plan to reassure the tumbling markets. Wall St. may shut down over fears of infection. As AtoZ Markets reported, the CME Group will suspend its trading floor in Chicago from 13 March. This would make CME the first major US exchange to close a trading floor due to concerns over the coronavirus.
2. Bitcoin market cap declines 50%
As the flash crash took place altcoin investors saw altcoins fall at an even more accelerated pace than Bitcoin. This caused many investors to flee to Bitcoin pushing Bitcoin dominance 65.3%. Every single coin on the first page of coinmarketcap is in the red at the moment. Other top coins have lost more than Bitcoin. Bitcoin Cash, Bitcoin SV, Ethereum, Binance, Tezos, Link, and many other leading altcoins lost 20-30% in the crash as well.
3. PlusToken scammers triggered the crypto market crash
PlusToken, a Ponzi scheme that swept China and Korea over the last few years, saw around $2 billion worth of bitcoin and other cryptocurrencies stolen from investors. Last Saturday, ahead of the traditional market rout caused by OPEC, PlusToken scammers moved a little over $100 million worth of bitcoin to so-called mixers, designed to disguise the origin and destination of the coins.
The fraudsters may have then sold off the bitcoins, causing prices to fall as supply flooded the market, according to Singhal. The bitcoin price fell by almost $1,000 per bitcoin on Saturday, before stock markets and other assets crashed.
“PlusToken scam moved another 13,000 bitcoin’s yesterday,” bitcoin and cryptocurrency analyst Kevin Svenson said via Twitter on Sunday.
“They also did something similar after bitcoin crossed above $10,000 this year. They are slamming the market with sell orders. Essentially we have a giant whale unloading after every move up.”
This latest round of Plus Token Bitcoin sales just happens to coincide with the coronavirus epidemic which the World Health Organization (WHO) has declared as a global pandemic. The virus is causing manufacturing in China to run at half capacity and is provoking fears of supply chain disruptions, as well as a global recession. The worst part is that the plus token scammers still have over 60,000 BTC to get rid of, according to blockchain data tracking the wallets containing the stolen funds.
What do you think was the biggest cause of today’s crypto market crash? Let us know in the comments!