Bitcoin has suffered a huge price crash, following El Salvador’s rollout of new laws making the cryptocurrency a legal tender. According to CoinMarketCap, the price of the coin fell from $52,000 to below $44,000 on Tuesday but has since recovered slightly and is now trading above $46,000.
Amid the crash, several other cryptocurrencies also suffered losses including Ethereum, Cardano and Binance coins. Crypto analyst Glen Goodman tweeted, “Horrible chart damage being done in BTC and the rest of the crypto market.” He also posed the question, “Bitcoin just bounced cleanly off the previous resistance line. Is this a retest of that line or the start of something much worse?”
The crash wiped hundreds of billions from the market, which had a value of over $2.35 trillion at the beginning of the day.
As people noticed the crash taking place, millions of traders rushed to their portfolios to cash out their assets or buy into the dip. This surge of activity caused crypto exchange Coinbase to experience huge issues with transactions and app errors.
The company stated that it was “aware transactions are currently delayed or cancelled at elevated rates and our apps may be experiencing errors.” The issues caused panic amongst many traders but are slowly resolving as the activity calms down.
The cryptocurrency market is now worth around $2.15 trillion, experiencing a $20 trillion loss. This is still much higher than the lows of around $1.3 trillion that were experienced in July.
Previous coin predictions have placed Bitcoin on a trajectory towards $100K+ by the end of 2021 however, less positive forecasts have predicted that the coin will see yearly lows of below $20K. According to Dutch analyst PlanB, Bitcoin is in the middle of a “dead cat bounce” that will result in these yearly lows.
While Bitcoin saw the largest collapse, the entire crypto market was affected by the coin’s loss. Many analysts believe that this is an insight into the volatility that will trademark the future of cryptocurrency trading.
Market leaders Ethereum and Cardano also saw major losses, following Bitcoin’s crash. The price of Ethereum has dropped from around $3,951 to $3,062 in the last 24 hours and now sits at $3,359. Cardano dropped to $2.02 and now sits at $2.36, a 17.16% decrease from previous highs.
Since the crash, prices of crypto have started to regrow however, the price of Bitcoin remains far from the highs that were seen just last week. This sudden price correction is likely to cause concern amongst Salvadorians who must now accept the coin as legal tender.
