Crypto Market Bloodbath: Bitcoin and Altcoins Tank 8-10% In Flash Crash
On Thursday, January 5, the broader cryptocurrency market has entered severe correction by eroding more than $200 billion worth of investors’ wealth in a matter of just 24-hours.
The recent price correction in crypto follows the broader market correction on Wall Street following a hawkish stand initiated by the U.S. Federal Reserve. As a result, everything including equities to crypto has corrected in the last 24 hours.
Bitcoin, the world’s largest cryptocurrency has witnessed a major price crash with its price plummeting under $43,000 levels for the very first time in three months. As of press time, Bitcoin is down by more than 8% trading at $42,989 levels with a market cap of $813 billion. Another key support levels to watch for Bitcoin in the short term will be $40,000 below which it can be heading towards a spiral downfall all the way to $30,000.
Along with Bitcoin, the correction in the altcoin space has also been severe. Ethereum (ETH), the world’s second-largest cryptocurrency has plummeted more than 12% crashing all the way under $3,400 levels. Along with Bitcoin, ETH too has been moving sideways over the last month.
Despite the hype surrounding the launch of Ethereum 2.0 this year in 2022, ETH hasn’t been able to hold much up to investors’ confidence. However, the Ethereum blockchain continues to expand along with the growing DeFi activity and the rise of NFTs.
Ethereum’s Layer-1 competitor Solana also tanked more than 10% during the recent market correction. Similarly, the recent top-performer in the top ten crypto list - Terra (LUNA) - has corrected in double digital with its price crashing all the way to $75. The LUNA price is down 25% from its all-time high of $100 during the last week of December 2021.
Another popular top ten cryptocurrency Polkadot (DOT) has also lost 13% and is currently trading at $26.21 with a market cap of $25.8 billion.
All these major price corrections point out at the waning investor confidence in the crypto market. While analysts were predicting $100K price levels for Bitcoin by the end of December 2021, things have rather turned the opposite.
However, Bitcoin and digital assets continue to be a ray of hope amid this inflationary environment. Billionaire investors like Ray Dalio have continued to seek exposure to this asset class.