After a double-digit rally, a double-digit selloff in the crypto market followed today – with altcoins taking the strongest hit, as is usual in this already tested crypto market playbook.
So, the news this morning is that everything is per usual – nothing new under the crypto sun. As we have seen many times before, the crypto riseth and the crypto dropeth. We have also been warned by analysts that November will see bitcoin (BTC) whales accumulation driving further appreciation in price, but this will be accompanied by higher volatility. And voilà.
Bitcoin today (10:03 UTC) dropped more than 11% in 24 hours and 2.5% in a week to USD 17,000, even dipping below this level – moving further away from the long-awaited all-time high. Ethereum (ETH) didn’t fare any better in 24 hours, dropping more than 15% to the price of USD 505, though it’s still green over the course of the week.
That’s far from all, as nearly all top 100 coins by market capitalization have gone red in the past few hours. Among the top 10, XRP was hit the hardest, dropping nearly 23%, followed by cardano (ADA)’s 20% and chainlink (LINK)’s 19.5% plunge. These are also among the highest drops on the entire top 100 list, with some other projects reaching as far as -24% at the moment.
However, later, BTC recovered, rallying from USD 16,600 to above USD 17,400 in a couple of hours.
Speaking earlier of warnings, another one came from venture capitalist and First Block Capital founder Marc van der Chijs, who already in August stated that more bitcoin flash crashes are to be expected in the new bull market. Furthermore, Vijay Ayyar, Luno exchange’s head of business development, told Bloomberg that “conditions are very massively overbought and bound for a correction,” adding that he believes “we’ll see all-time highs before a larger drop/correction.” Additionally, economist and trader Alex Krüger argued that altcoins “usually move in the *same direction* of bitcoin, but more (in both directions)” and you “can think of [altcoins] as leveraged bitcoin plays.”
That said, it seems to be to nobody’s surprise that the entire market turned bloody with BTC as well. As for individual altcoins, Chainalysis chief economist, Philip Gradwell, gave a possible explanation for the drop of at least one of them. He said that, unlike BTC and ETH with “relatively usual” on-chain metrics, “XRP continued to have large inflows to exchanges on Wednesday, 125% above the 30 day moving [average], although these were less than Tuesday’s record inflows. That is a lot of supply for sale, inevitably leading to lower prices.”
Per the comments by analysts, traders, and others online, much of the damage was done on crypto exchanges Binance, Bybit, and FTX, suggesting traders being overleveraged there.
More reactions:@krugermacro News only have such an impact if the market is already on a downtrend and sentiment not so bullish any… https://t.co/6qtk6wXEZP
— Martin(a) Krung (@martinkrung)
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$950 million liquidated in the past hour.
Happy Thanksgiving
— Zack Voell (@zackvoell) November 26, 2020
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3/ With the correct narrative in place, the desire and willingness of new HODLers of #Bitcoin to keep their positions for the long term will be far stronger than it was in the past. The narrative will take Bitcoin from where it is today to eclipsing gold in market capitalization.
— Vijay Boyapati (@real_vijay) November 26, 2020
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Today is peak bullish dumping. Any further dumps would only be more bullish imo. https://t.co/oBma8C0ry1
— Su Zhu (@zhusu) November 26, 2020
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@MacroCRG Yep I learned an expensive lesson last night. Half my account wiped out. Back to trading spot for a while… https://t.co/N9VuT9s2K7
— FOMO (@fomobeast)
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Learn more:
This Is The Main Story in Bitcoin Now According to Pantera Capital CEO
3.4m Bitcoin Available As BlackRock’s CIO Says BTC to Replace Gold
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