The world’s most famous cryptocurrency, Bitcoin, faced another drop early Saturday, losing almost $10,000 in value. It reached a temporary price of $42,000 and shortly after reached $45,000. At the same time, Ethereum lost about $1,100 in value.
What Caused the Sell-Off?
As most cryptocurrency assets saw a sharp decline, the reasons remain unclear. According to CoinGecko, the total market cap currently stands at about $2 trillion. It seems that the spot market selling drove the prices low before triggering the huge stop loss in the derivative markets.
However, this might not be the only reason as the Federal Reserve is slowing down its asset-buying program.
According to the director of CEC Capital, Laurent Kassis, a total of 1,500 BTC were sold in less than a minute as the sell-off started.
On the other hand, Tether, the world’s largest stablecoin, saw a short spike in price, reaching $1.025 on Coinbase. However, this could be considered normal since most traders turn to Tether during similar market movements.
What’s more, El Salvador’s president, Nayib Bukele, stated that the country had purchased an additional 150 bitcoins, as it did in the few previous drops.
This Bitcoin crash was the largest since late September when the news of the latest Coronavirus variant combined with the obvious high inflation.