Bitcoin’s price fell more than $ 800 in less than five minutes on Tuesday, pushing the broader cryptocurrency market into the red.
The sale started at 14:45 UTC (10:45 am ET) when the cryptocurrency was trading at highs above $ 10,137 and by 14:49 UTC, the price dropped to $ 9,298. At press time, bitcoin is changing hands near $ 9,500, representing a 6.5% fall on the day, according to CoinDesk’s Bitcoin Price Index. On BitMEX, prices were as low as $ 8,600.
The sharp fall in prices may have caught many traders on the wrong side of the market. Moreover, the market was looking strong following Monday’s convincing move above $ 10,000, and a few analysts expected bitcoin to continue rising toward $ 11,000.
However, buyers again failed to keep prices above the $ 10,000 mark. The cryptocurrency has struggled many times over the past 12 months to establish a strong base above $ 10,000. The retreat, however, is unlikely to deter investors, who believe in the long-term value of bitcoin as a safe haven asset and a hedge against inflation.
In addition, “HODLing” sentiments have remained strong despite the unprecedented price volatility experienced over the past five months. Nearly 60% of bitcoin’s supply has not changed hands in over a year, a likely sign that investors are holding expectations in return, according to Glassnode.
The latest sale, however, is weighing on alternative cryptocurrencies. At press time, litecoin is down 5%, while Ethereum’s ether token is reporting a daily loss of 6%. Other major cryptocurrencies like bitcoin cash, bitcoin SV, and XRP are also flashing red.
Meanwhile, traditional markets are seeing mixed action. While the Dow Jones Industrial Average is up 0.4%, the technology-heavy Nasdaq index loses 0.5% of its value. Major European equity indices such as Germany’s DAX and the UK’s FTSE are up 3% and 1%, respectively.
European shares appear to have gathered a strong bid in response to reports that Germany could launch a 100 billion euro ($ 112 billion) fresh stimulus package to protect against the coronavirus. The European Union has already proposed a 750 billion euro European scheme stimulus scheme.