Bitcoin and other major cryptocurrencies suffered big drops on Friday 22th November. This crypto crash saw fear running through the markets. How badly were altcoins affected and what was behind this day of dramatic losses?
The Facts and Figures
This was the first time that the crypto markets had dipped below $200 billion in about six months. Bitcoin also plunged to its lowest value since six months ago.
It has been categorised as the worst day for cryptos in 2 months. The Bitcoin Fear & Greed Index gives us an idea of the overall sentiment in the market. This showed “extreme fear” as the overwhelming feeling.
Bitcoin was the first digital currency to feel the effects. However, the crypto crash soon spread to other coins. The combined market cap for all of the coins slipped by $28 billion in just 14 hours.
The value of all of the cryptocurrencies being traded fell as low as around $190 million. This was as low as it has been since the end of the crypto winter at the start of May, which was the last time it was less than $200 billion. At the time of writing this article, they have managed to climb back up to over $196 million.
As for the price of bitcoin, BTC dropped to under $7,000. It previously hadn’t been this low in 6 months. The lowest point saw it touch $6,875. At the time of writing, BTC has recovered to $7,227. The falling price coincided with high trading volumes across the market.
What Caused This Crypto Crash?
It seems clear where this downward trend started. Fear started to grip the market with online reports of the police in China raiding a Binance office. The biggest cryptocurrency exchange in the world was supposedly shut down. However, the company later denied that this happened, or that they even have the offices in Shanghai that were allegedly closed.
What is true is that the Chinese authorities are once again threatening to crack down on crypto trading. They have reportedly located 39 exchanges that are operating illegally. Analysts believer this could have a major effect on prices in the near future.
The extreme volatility of Bitcoin means that predictions about its future price vary wildly. This latest crypto crash just goes to show that there are still a lot of ups and downs left in this market.