After a USD 10,000 drop in the price of bitcoin (BTC) over the course of the day yesterday, crypto traders are now trying to figure out what happened, what caused the sudden selloff, and where the market will go from here.
At 09:40 UTC on Wednesday, bitcoin, ethereum (ETH), and most altcoins were still down markedly over the past 24 hours, despite dip buyers coming to the rescue to bid up the prices of many coins from their lows yesterday. The price of bitcoin is down 10% over the past day. It trades at USD 46,129. ETH is down 10% to USD 3,382.
Willy Woo, a popular bitcoin analyst, concluded his day’s summary by noting that the exchanges are seeing outflows once again. This is a normal on-chain signal as investors move their coins away from exchanges to their wallets for longer-term storage.
He said that yesterday’s crash was similar to other crashes. Later, he pointed out that on-chain fundamentals and derivative markets are “two distinct systems” and that what matters is “on-chain investor movement”.
Similarly, other analysts shared the view that the market crash was a healthy correction to flush out overleveraged traders, with trader Lightcrypto noting that the sell-off caused a “32% haircut to total derivatives open interest:”
“Buying rather than selling is almost always a good strategy. Lightcrypto stated that dip is more like a cleansing than an inversion.
Yesterday’s chaotic trading saw mixed results in terms of exchange performance.
CoinbaseOnce again, a market indicator that has been repeatedly criticized for falling during volatile periods, is being re-evaluated.reportedYesterday’s partial outage was due to “some orders failing due to high volumes.”
According to Reddit users who howeverShareHis trading experience yesterday in the r/CryptoCurrency Subreddit, CoinbaseCoinbase ProBoth were “totally offline”, for longer than three hours, while the market crashed.