Why Is Crypto Down Today? Cryptocurrency Market Crash 2021

On Thursday, the Treasury Department said it would require businesses to report any bitcoin payment over $10,000, citing an effort to crack down on tax evasion. The drop seems to be triggered by the infrastructure bill signed by U.S. President Joe Biden yesterday, Darius Sit, co-founder of crypto trading firm QCP Capital told The Block. The bill includes tax reporting provisions that require crypto exchanges to report information to both the Internal Revenue Service and to their customers, including capital gains.
Bitcoin funding rates, periodic payments to long or short traders based on the difference between perpetual contract and spot prices, have dropped. Bitcoin price dropped below $57,000 on November 18, and the accumulation by non-exchange whales hit a peak. The third-largest non-exchange whale scooped up 3038 Bitcoin tokens over four transactions, worth $180 billion. For those who have been investing in cryptocurrencies for years, dramatic gains and losses are nothing new. For example, bitcoin recorded a previous record high of nearly $20,000 in December 2017, but by December 2018 was trading below $3,500.

So-called altcoins such as cardano, binance coin, XRP and dogecoin were also nursing heavy losses after falling sharply on Tuesday and Wednesday. The Bloomberg Galaxy Crypto Index, which tracks a range of crypto tokens, was down 0.7% on Wednesday and had shed 11.5% over two days. Matters weren’t helped by problems on major cryptocurrency exchanges Coinbase, Kraken and Gemini, which led to transactions being delayed or canceled. The digital currency Solana also fell by 7.47 percent to $225.99 in the last 24 hours. Ethereum, the second-largest cryptocurrency, is down by about 4.76% over the past 24 hours at $3,767, while Dogecoin is down 7.61% at $0.2882.

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Analysts said price falls on Tuesday were accelerated by high levels of leverage in crypto markets. The global crypto market cap also saw a fall of 7.10 percent over the last 24 hours and is currently at $2.66 trillion. THE price of Bitcoin dramatically dropped more than 10 percent on Tuesday as El Salvador suffered problems in the rollout of the cryptocurrency as its legal tender. The decline comes as China intensifies its crackdown on Bitcoin. The Chinese government has long viewed cryptocurrencies as a threat to its control over capital flows in the country. “Long-term bitcoin bulls are getting nervous as a break of $30,000 could see a tremendous amount of momentum selling,” Edward Moya, senior market analyst at foreign-exchange trading service OANDA, said in a recent note. “Many traders have waited for one more push lower, which could see crypto traders wait for a plunge towards the $20,000-$25,000 area.” Over the weekend, bitcoin formed a death cross, a chart pattern that signals the potential for a major sell-off. Bitcoin’s average price over the past 50 days fell below its 200-day moving average, which means there could be more pressure on the digital coin. Gerard points out it is not just because of mining regulation that crypto prices have slumped.

The price changes for Bitcoin alternately reflect investor enthusiasm and dissatisfaction with its promise. Satoshi Nakamoto, Bitcoin’s inventor, designed it for use as a medium for daily transactions and a way to circumvent the traditional banking infrastructure after the 2008 financial collapse. Julius Mansa is a CFO consultant, finance and accounting professor, investor, and U.S. Department of State Fulbright research awardee in the field of financial technology. He educates business students on topics in accounting and corporate finance.

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After tapping $66K on Monday, bitcoin’s price slid below the $60K handle to a low of $58,563 per unit. After the steep fall, bitcoin’s price has recovered some losses, rising back above the $60K range and has started to show some consolidation. This maturing, however, has failed to tame the wild gyrations that characterise crypto markets. Today it hovers around $40,000, having dipped to $29,000 as recently as July 29th.

By March of 2021, Bitcoin prices reached new all-time highs of over $60,000. Continued institutional interest in the cryptocurrency further propelled its price upward, and Bitcoin’s price reached just under $24,000 in December 2020, for an increase of 224% from the start of that year. It took less than a month for Bitcoin to smash its previous price record and surpass $40,000 in January 2021. The autumn of 2021 saw another bull run, with prices scraping $50,000 but accompanied by large drawdowns to around $42,500. Read more about Btcoin to Dollar here. The digital currency began the year trading at $13.40 and underwent two price bubbles in the same year. The first of these occurred when the price shot up to $220 by the beginning of April 2013. That swift increase was followed by an equally rapid deceleration in its price, and the cryptocurrency was changing hands at $70 in mid-April. Among asset classes, Bitcoin has had one of the more volatile trading histories. The cryptocurrency’s very first big price increase occurred in 2010 when the value of a single bitcoin jumped from just a fraction of a penny to $0.08. Some have compared the cryptocurrency to the fad for Beanie Babies during the 1990s while others have drawn parallels between Bitcoin and the Dutch Tulipmania of the 17th century.

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Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Prices fluctuated wildly in early morning trading Wednesday, with traders apparently smashing the sell button. A general move away from cryptocurrency-margined futures contracts suggests investors are taking a risk-off approach. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Cryptocurrencies began to crater on Tuesday as El Salvador made bitcoin legal tender in a landmark moment for the world’s biggest cryptocurrency. The rollout was afflicted by glitches, with the small central American country’s Chivo wallet having to be taken offline. Bitcoin fell as much as 5% on Wednesday, according to Bloomberg data, before paring losses. In other news, Bitcoin underwent a major upgrade on 14 November that enables the execution of more complex transactions by its blockchain.
Crypto-savvy holders of XRP had probably sold the price pump back in early February, especially large holders known as whales. So when you have an asset that’s driven by sentiment, you have to realize that the emotions of traders propel the market. That’s true in the case of stocks, too, but they also may have a real stream of growing cash flows from their issuing company to accelerate them higher. Whether you decide to sell your cryptocurrency or see a dip as an opportunity to buy more, you need to act with a cool head. Making emotional decisions, especially when trading, rarely results in anything good happening. So before you rush into the market in a panic, you’ll want to reflect on why you’re trading crypto in the first place. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site.

This may influence which products we write about and where and how the product appears on a page. It doesn’t help that crypto is used as part of ransom attacks and other criminal activities. The answer to these questions can help guide you to the proper decision. In either case, you’ll want to act in accordance with your own goals. In other words, if you believe in the long-term Buy Litecoin opportunity, think with that mindset. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team.

As the crypto-sphere expands, so too will its potential to cause wider market disruption. The rush to meet margin calls in cryptocurrency—the collateral of choice for leveraged derivatives—could force punters to dump conventional assets to free up cash. Alternatively, they might give up trying to meet those calls since their crypto holdings would no longer be worth much, triggering liquidations. Meanwhile, other types of leverage exist, where regulated exchanges or even banks have lent dollars to investors who then bought bitcoin.
The price of bitcoin has declined nearly 10% in the last 24 hours, dipping significantly below $60,000 before bouncing back. Musk has been a long-time advocate of cryptocurrencies and the Tesla decision was felt across the market, with other digital tokens going down in price. A further blow was dealt when China ordered Bitcoin mining in its Sichuan province to shut down completely and furthermore told banks to stop supporting crypto transactions, in a latest wave of restrictions on cryptos. It follows recent crashes brought on by Tesla making a u-turn on accepting Bitcoin as payment for its products and China clamping down on initial coin offerings, block exchanges and warned against speculative trading. In the cycle’s structure, speculative bubbles are necessary to provide funding and drive a new technology’s evolution. And so, each swell and ebb in Bitcoin’s price has shone a spotlight on the shortcomings of its ecosystem and provided a fresh infusion of investor funds to develop its infrastructure.
The value of the digital currency has risen by 0.03 percent in the past seven days. After topping $64,000 in April, bitcoin has struggled to reclaim its all-time highs since then following a series of events. Closer home, the Chinese government isn’t letting up any pressure on its internal crackdown on crypto as popular cryptocurrency news outlets now appear to have begun suspending operations. Crypto outlets ChainNews and Odaily have both become inaccessible over the past few days and neither of the outlets have stated a reason. Instead, both outlets have continued their activity on Twitter and Telegram, apps that are banned in China. Other cryptocurrencies’ prices also sharply rose, then followed by losses of value during this period. In May 2021, the value of Dogecoin, originally created as a joke, increased to 20,000% of value in one year. Bitcoin and other cryptocurrencies have been named as speculative bubbles by several laureates of the Nobel Memorial Prize in Economic Sciences, central bankers, and investors. Gary Gensler, who took over as chairman of the Securities and Exchange Commission last month, has said that cryptocurrency markets would benefit from more oversight to protect investors.
“All EMAs steeply downward, Bollinger band opening significantly expanded, the current indicators are indicating a high bearish sentiment in the market,” Huobi Global told Bitcoin.com News on Tuesday morning. “From the daily level, BTC is now in a long negative line, the short-term uptrend has broken, daily volume is enlarged, the short-term trend may continue to move downward, pay attention to the support below,” Huobi added. For the future of the cryptocurrency, the research firm has seen the possibility of a further dip to a sum of $55,000- if the surmounting pressure of selling would force the cryptocurrency below the price of $57,750. Bitcoin price went down to fresh lows on the 18th of November, and the brief visit to its price level of $56,000 resulted in quite a sell-off in ETH and other coins.

They work with clients to make sure volatile crypto investments aren’t getting in the way of other financial priorities, like saving an emergency fund and paying off high-interest debt. Digital currencies are down in value on Tuesday as the market capitalization of the entire crypto-economy shed billions during the last 24 hours. Bitcoin is down 7.5% during the last day and has fallen 10.2% for the week. CryptoQuant’s data also shows that even the amount of Tether held in OKEx wallets had dropped by 97.6% within just a week. What this reflects is that users began transferring their assets to a different exchange or their own cold wallets.
After a year of gains and record highs, crypto currencies are enduring a turbulent time with unpredictable price changes. Predictions for the future value of Bitcoin vary based on who makes the estimate. According to Jeremy Liew, a partner at Lightspeed Venture Partners, Bitcoin could reach $500,000 per coin by 2030. According to the June 2020 Crypto Research Report, the cryptocurrency could go over $397,000 by 2030. As application-specific integrated circuit mining operations began to take hold, the price of Bitcoin began to follow its marginal cost of production, largely due to the cost of electricity needed to run mining equipment. As the Bitcoin network grew, so too did its mining difficulty, requiring ever-larger amounts of energy. This is partly due to the fact that the narrative around Bitcoin has changed from a currency to a store of value, in which people buy and hold for long periods of time rather than use it for transactions.

Investing in cryptocurrencies and other initial coin offerings is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Because each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. Finally, economic instability is another indicator of price changes for Bitcoin. Since its inception, the cryptocurrency has positioned itself as a supranational hedge against local economic instability and government-controlled fiat currency. According to reports, there is a period of increased economic activity on Bitcoin’s blockchain after an economy hits road bumps due to government policy. Countries like Venezuela, which have experienced hyperinflation of their currencies, have seen huge increases in the use of Bitcoin as a means of transaction as well as storing wealth. This has led analysts to believe that the cryptocurrency’s price increases and global economic turmoil are connected. For example, capital controls announced by the Chinese government were generally accompanied by an uptick in Bitcoin’s price. The 2020 pandemic shutdown produced macroeconomic instability on a global scale and galvanized Bitcoin’s price, resulting in a record rally.

• HE RECENT expansion of the crypto-universe is a thing of wonder.
• The macro-environment also looks “a little shakey” with high levels of inflation, according to Sit.
• FXStreet analysts expect the BTC price to drop to $57,000 as the correction has begun.
• Crypto faces other significant hurdles, including the financial and environmental costs of “mining” them.

Major cryptocurrency exchanges went down amid a market-wide price crash. From January to February 2018, the price of Bitcoin fell 65 percent. By September 2018, the MVIS CryptoCompare Digital Assets 10 Index had lost 80 percent of its value, making the decline of the cryptocurrency market, in percentage terms, greater than the bursting of the Dot-com bubble in 2002. From 8 March to 12 March 2020, the price of Bitcoin fell by 30 percent from $8,901 to $6,206. During Bitcoin’s early days, liquidity was thin, and there were very few investors in cryptocurrency markets. This state of affairs translated to wide price swings when investors booked profits or when an adverse industry development, such as a ban on cryptocurrency exchanges, was reported. The rise and fall of cryptocurrency exchanges, which controlled considerable stashes of Bitcoin, also influenced Bitcoin’s price trajectory. Meanwhile, as bitcoin, ethereum, and a slew of crypto markets suffer deep losses, the crypto assets hedge fund Ark36 executive Mikkel Morch told Bitcoin.com News that the drawdown is normal. However, Musk seems to have reversed course in recent weeks in favor ofdogecoin, the meme-inspired cryptocurrency.

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A on May 18 statement posted on the Chinese Banking Association’s website said financial institutions should “resolutely refrain” from providing services using digital currencies because of their volatility. Bitcoin and other cryptocurrencies are trading at a discount in India after the country’s government listed a crypto bill in Parliament for discussion yesterday. The price of bitcoin has declined nearly 10% in the last 24 hours. It came after the electric car company bought $1.5b (£1.06b) of Bitcoin shares, which in turn sent the market price of both the crypto and Tesla soaring. The decision has already had an impact on the global crypto market. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

Bitcoin’s price faltered this week as the cryptocurrency struggled to reach the all-time high of over $61,000 achieved just two weeks ago. This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CryptoQuant CEO Ki Young Jo emphasized that on-chain indicators continue to reflect a strong buying pressure. This means that the bull market is not ready to end anytime soon. However, he also noted that when the whales are active on exchanges, the likelihood of Bitcoin’s price going sideways or down is also high.

The absence of cascading liquidations, 25% delta skew and the margin lending ratio all suggest that Bitcoin price bottomed at $56,500. If you let your emotions get too much into it then you might sell at the wrong time, make the wrong decision,” says Yang. The next resistance that Bitcoin has to break in order to return to its bullish state is at $60K which is not far off from its current price. As per the tweet by @BitcoinFear on Twitter, the status of the coin now sits at 49 for the Bitcoin Fear and Greed Index. A snapshot of Bitcoin’s price between March 22 and March 23, 2021, per the CoinDesk tracker. I’m a technical writer and marketer who has been in crypto since 2017. While there is no clear industry consensus on the reasons, there are plenty of suspects to consider during Bitcoin’s latest fall from grace. The declines, however, have perhaps inflicted more damage on new investors. Get instant access to breaking news, in-depth reviews and helpful tips.

Whales and miners have been accumulating Bitcoin in batches throughout the recent drop in BTC price. Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money. Those are some of the highest-potential alternatives to cryptocurrency. If you see it that way, you may want to continue holding your position or use a dip in the price to invest more.

“No one can really account for this because Bitcoin miners have never behaved like that, except when they can’t sell the coins because there aren’t enough people with dollars to buy them. Gerard argues exiled miners have a billion dollars of Bitcoins that they are keeping as stockpiles and not selling them. The other reason for the crypto price slide is the continued fallout from China’s crackdown on Bitcoin mining, which led to an exodus of miners to the US and Canada. One such famous figure is Cathie Wood, CEO of the investment management firm ARK Invest.
The retreat in cryptocurrency prices also comes as many of them hit all-time highs in November. Negative crypto-related comments from Chinese authorities have often led to a sell-off in digital coins, even if those comments are not overly new. Ether, the second-biggest cryptocurrency, fell 6.8% to $4,254.74. The first rule of Bitcoin trading should be “expect the unexpected.” In just the past year alone, there have been five instances of 20% or higher daily gains, as well as five intraday 18% drawdowns.