Yesterday, 19.05.2021, we witnessed history. Such things the market has not seen before, that in two weeks the capitalization of all virtual currencies fell from $2.5 trillion to $1.5 trillion. Probably no market this large has seen such a massive bump.
To say that cryptocurrency market speculators had an emotional swing yesterday is like saying nothing at all. Such massive drops in such a short period of time, pulling in so much money, have never been seen before in history. The BTC/USD exchange rate at one point collapsed below $30,000, where just a month ago it was setting new records at $64,000 with the debut of Coinbase. Thus, the largest cryptocurrency lost 53 percent of its value in a few weeks. This represents one of the biggest corrections even compared to the upward cycle of 2013 and 2017. Nevertheless, BTC started to turn around very quickly and is now already trading $10,000 above yesterday's low of more than $40,000 apiece. Volatility therefore remains very high and is worth keeping in mind. On the other hand, there were reports that large investment funds benefited from yesterday's panic and started buying BTC in the region of USD 35 thousand. So perhaps the bottom is already behind us.
Even bigger drops than on BTC appeared on the ETH and LTC market. The ETH/USD exchange rate fell to the lowest level since the end of March. The decline ended in the $1900 area, where just two weeks ago ETH was setting a new peak in the $4400 area. LTC/USD fell 65 percent from its peak, or from the area of USD 400 to USD 130.
At first glance, the scale of the falls seems frightening, but on the other hand, after several hundred percent earlier increases, it is worth looking at the charts on a logarithmic scale. There, the situation looks completely different, and yesterday's declines even appear as small corrections in large trends. The higher the market is, the more impressive the scale and size of decreases are.
However, the question remains open whether yesterday's events will be able to reverse the whole trend?
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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