A bitcoin flash crash Monday morning brought down major cryptocurrencies, wiping over $ 200 billion from the crypto market.
Bitcoin fell below $ 44,000 after falling more than 8% in a matter of hours, although those losses were modest compared to its rivals.
Ethereum (ether) fell more than 10 percent, while Cardano (ada), Solana (SOL), and dogecoin all fell more than 13 percent.
Salvadoran President Nayib Bukele tweeted that he had used the stock market crash as an opportunity to “buy down” and raise El Salvador stocks, but some analysts have warned that the latest price drop could be part of a longer term trend.
Other experts remain convinced that any short-term volatility will ultimately be forgotten as bitcoin hits new all-time highs in 2021.
You can follow all the latest news, updates and expert price predictions in our live blog here.
Bitcoin’s price model mirrors 2013 and 2017
The counter-argument to the “dead cat’s rebound” theory from the last post is that this bitcoin price crash is just one hit in the middle of a record-breaking bull run.
Similar declines were seen in 2013 and 2017 as new all-time highs approached, with some analysts pointing to “consistent” market patterns this time around.
Bullish analysts believe this current cycle’s peak is above $ 100,000 – well above the record price of $ 64,000 seen earlier this year – and will be reached before the end of 2021.
Currently at around $ 44,000, bitcoin has a long way to go to make it happen.
Anthony CuthbertsonSeptember 20, 2021 3:29 PM
Is the ‘Dead Cat Bounce’ Bitcoin Price Crash Over?
The latest price crash has divided bitcoin analysts over whether this is the start of a longer-term downtrend or simply a blow on the way to new all-time highs.
According to the pseudonym of Mr Whale, who has amassed more than a quarter of a million followers on Twitter with his largely pessimistic predictions, the recent price gains were part of a “dead cat bounce” price pattern.
This is where the price rebounds during a bear market, before continuing to fall. Mr Whale shared this image today to illustrate the phenomenon, although there has been a lot of reluctance from crypto advocates rejecting the take.
Mr Whale puts bitcoin on track to hit below $ 10,000 over the next year, but it should be noted that he had bearish forecasts throughout the 2020/21 bull market.
Anthony CuthbertsonSeptember 20, 2021 2:50 PM
El Salvador ‘buys down’ during bitcoin price crash
Bitcoin price drops typically cause one of two extreme reactions from traders and investors.
The first is panic selling, which is usually the response from short-term holders and new market entrants. This pushes the price even lower and induces more fear in the other so-called “paper hands”, who are also selling.
The second reaction is to use the falling prices as an opportunity to acquire more bitcoin at a lower price. These so called “diamond hands” are often long term holders who experience its wild swings but are optimistic about its longer term trajectory.
The President of El Salvador turned out to be in the latter camp, although he only recently bought bitcoin for the first time. Nayib Bukele revealed that he “bought the drop” with a $ 6.7 million investment in the cryptocurrency.
You can read the full story here.
Anthony CuthbertsonSeptember 20, 2021 2:09 PM
Dogecoin Founder Overcomes Falling Prices in Typical Ways
Dogecoin founder Billy Markus reacted to the market-wide price drop by sharing a dog’s gif of “That’s good”.
The memes-inspired cryptocurrency suffered some of the heaviest losses on Monday, falling nearly 15% and showing no signs of slowing down.
After trading above $ 0.25 over the weekend, dogecoin is now threatening to drop below $ 0.20 for the first time since May. Despite these losses, the cryptocurrency is still up nearly 10,000% from the same period last year.
That’s no big consolation for Markus, who sold his original holdings years ago and only redeemed earlier this year (although still when the dogecoin was below $ 0.20).
Anthony CuthbertsonSeptember 20, 2021 1:52 PM
Bitcoin price flash crash causes crypto market to fall
Bitcoin suffered a series of mini flash crashes on Monday morning, pushing the price below $ 45,000.
After trading near $ 49,000 over the weekend, the cryptocurrency is now back to levels it was exactly a week ago.
The drop in prices caused a market-wide drop, with other leading cryptos falling 5-15% earlier in the week.
Of the top 10 cryptocurrencies, Solana (SOL) was hit the hardest. Altcoin has fallen more than 13% in the past 24 hours, pushing its market cap to $ 41 billion – $ 15 billion lower than last month’s peak.
Anthony CuthbertsonSeptember 20, 2021 12:29