As of press, bitcoin was at $17194, down more than 8%.
Not only that, but other major cryptocurrencies also plummeted, with Ethereum and letcoin falling by more than 10%, while the newly emerging tokens XRP and TRX plummeted by nearly 20%.
2.5 billion in 1 hour
Market analysts believe that since the outbreak of the epidemic, the unprecedented water release measures of the US Federal Reserve have made the US dollar weaken all the way, and bitcoin, as a means of fighting against devaluation, is once again sought after by the market; at the same time, as the output of bitcoin was halved for the third time in May this year, further pushing up the price.
Why did it plummet?
Just as bitcoin approached its all-time high of $19821 in 2017, there were market rumors that the US Treasury planned to track the owners of autonomous cryptocurrency wallets.
The news seems to have triggered a collective sell-off of autonomous cryptocurrencies.
The CEO of coinbase revealed that in addition to the US Treasurys enhanced regulation of cryptocurrencies, the trading platform has also begun to prevent customers from making new margin trading, cancel all open limit orders and completely terminate margin trading next month. The move triggered further panic in the market.
Meanwhile, CNBC fastmoney host Brian Kelly said on the evening of 25th US Eastern time that both fundamental and technical factors indicated that with the excessive rise of bitcoin, a correction might be imminent.
Kelly cited three possible reasons for the short-term bitcoin pullback: the surge in counterfeit currency, the growth of address number and the over pricing of bitcoin, and the high capital rate.
Ki youngju, chief executive of cryptoquant, also said that this is an adjustment before bitcoin broke through $20000, but other long-term distribution indicators such as bitcoin and stable currency reserve show that potential purchasing pressure is still widespread so far.
Whether its hearsay or technical adjustment, todays market shock let many high chasing leveraged traders burst positions.
According to bybt, a derivatives data provider, the crash cleared $950 million of positions on major exchanges.
It is worth noting that bitcoin has always been crazy to rise and even more crazy to fall.
According to incomplete statistics, bitcoin has experienced 11 sharp falls since 2010. After skyrocketing, the situation of cutting the waist and the knee can be seen everywhere. The roller coaster market is becoming the target of many Wall Street institutions.
However, in the past few rounds of bitcoin slump, the crackdown by governments of various countries often causes fatal damage to the price of bitcoin. Supporters of bitcoin say the focus on cryptocurrencies is different from the slump three years ago, because of growing interest from institutional investors such as fidelity and JPMorgan Chase. Source: Chen Hequn, editor in charge of China fund daily_ NB12679
However, in the past few rounds of bitcoin slump, the crackdown by governments of various countries often causes fatal damage to the price of bitcoin.