The market has decided to test the already fractious nerves of investors and plunge in value. Crypto price sites are a sea of red right now; it’s like November never ended…
Cryptocurrency’s total value practically went off a cliff at just before 06:00 GMT this morning. The market cap went from a princely $138bn to $130bn in the space of an hour. Although crypto stabilized for a few hours, prices began to fall again as the European and American markets opened in turn.
At 16:00 GMT, crypto was valued at $127bn but has since fallen by a further $7bn. The market’s total value came to $122bn, at the time of writing: that’s a 12% over the course of the day. This makes today the single biggest wipeout since the Christmas crash.
Which coins are most affected?
Out of the top ten, the biggest losers seem to be Ether (ETH) and Bitcoin Cash (BCH), both of which have seen 15% cut from their market valuations in the past 24 hours. EOS and Litecoin (LTC) aren’t far behind though, with each seeing 14% drops in the same timeframe. Although still affected by today’s crash, XRP has performed slightly better and has actually superseded ETH to become the second largest cryptocurrency by market cap.
Excluding the stable coin Tether (USDT), Bitcoin (BTC) is the coin in the top-ten which has fared the best today. Still that’s a drop of 9%, taking BTC below the $4,000 mark it had been hovering around all week. It is currently trading at $3,700, it’s lowest valuation since the end of December. It could fall back down to its yearly 15-month low of $3,200 if the trend continues.
Other notable losses outside the top-ten also include coins which had performed well earlier in the week. Pundi X (NPXS), which had seen a sudden surge yesterday, is now down by over 20%; IOST, which had 30% added to its market cap on Monday, was also down by 20%.
What’s behind the crypto wipeout?
There are currently a few ideas going around. Data collected by CryptoCompare suggests that most of the sell-offs in the morning were denominated in Japanese Yen (JPY) and the Thai Baht (THB). This suggests that it was Asian investors who began the sell-off, which may have now spread to Western markets as the day wore on.
This may not be the only reason, however. David Thomas, the CEO of GlobalBlock, a London-based cryptocurrency broker, believes bearish news may partly be behind the wipeout. The Ethereum Classic (ETC) reorg on Monday as well as rumors of a potential whale moving $68m worth of ETH onto an exchange, may have spooked investors.
He also added that the sell-off may be a quick reaction to traders making a quick profit from high prices. “ETH has risen off its lows before Christmas by some 80%,” he wrote. “Any weakness can often lead to a trigger of profit taking from those that managed to catch the lows around $82 in December.”
The author is invested in digital assets, including BTC and ETH which are mentioned in this article.