Cryptocurrency Market Sheds $25 Billion Overnight
The weekend was extremely terrible for the crypto market due to a huge decline just overnight.
On the 10th of June, 2018, CCN.com reported that there was a large scale decline in the entire cryptocurrency market which accounted to be more than $25 billion!
The report said that this could have happened due to a huge sell-off of the Bitcoins on the night of 10th. A sell-off is basically a process of rapid selling of your securities such as stocks, bonds, ETFs, commodities or currencies (like BTC in this matter).
What caused this major downfall?
Since every single cryptocurrency follows all the patterns of the coin which is considered to be the largest coin in the world by the market cap, hence this resulted in the decline with such a big margin.
But there are 2 in-depth reasons behind this large-scale sell-off. These in-depth reasons are mentioned below-
The Problem faced by Volume and Demand
The main reason for this downfall or decline could be based on the Volume as well as Demand. In the weekend, the BTC suffered by not rebounding even with the presence of a short-term optimization. Also, there was enough stability relative to the crypto space, yet the prices of the bitcoin fell steeply.
A plethora of momentum indicators like MACD, RSI or Moving Averages suggested an optimistic short-term pattern for the BTC. Even then the price movement in the crypto world is still prone to huge shifts according to the current market conditions.
A trend was noticed in the previous week due to the purchases in recent days, which resulted in the BTC to gain a short-term upward momentum. Few analysts noted that the BTC suffered a value drop due to the reversal downward trend. The drop was from $10,000 to around $7,000. But due to a corrective-rally, it was noted that the value rose to $7,500 rather than dropping continuously to $6,000.
The Daily Trading Volume (DTV) happens to NOT be the reason for the value of BTC, according to the investors. This is mainly because the DTV of the bitcoins from last week resulted in just half of the previous few week’s volumes. Till date, the BTC is trading at just about $6,737.
Cause of Hacks
The previous issue of Volume, as well as demand, had increased due to the recent news of cybercrime. One of the recent hacks was the loss of $40 million in digital tokens by Coinrail-a crypto exchange in South Korea. Another one is the hack against Japanese Syndicate few days back.
Hence, these hacks can give an effect on the volume as well as a demand which in return produces a huge effect to the BTC value as a whole.