Cryptocurrencies dropped another $20 billion in combined market value on Monday – less than 24 hours after posting a similar drop over the weekend.
The sharp decline in market value was triggered after a single trader unloaded 20,000 Bitcoin on the Bitfinex exchange.
In the span of roughly 16 hours, the total cryptocurrency market cap has fallen by over $30 billion, according to TradingView. The total value of the entire market is now $283 billion – the lowest since June.
With the exception of Tether (USDT), which has seen its market cap swell in recent months, all of the top-20 coins by market cap were trading lower on Monday.
Looking at the chart above, we can see the crypto market has now pulled back a whopping $78 billion from its yearly peak, when it touched $380 billion. Still, the long-term trend remains intact as it’s still above the 20-day EMA.
In the past, we’ve seen similar price consolidations during bullish seasons, meaning there’s no reason to panic at all. Last week, I wrote about how the long-term trend of Bitcoin remains positive and that I’m expecting the price to hit $20,000 by the end of the year.
What I’m doing personally is taking this opportunity to increase my main portfolio. Whether you want to bet on some prominent altcoins or just buy BTC’s dips, my point is it’s a good idea to take these opportunities to average your buy-ins to disperse your risk over time. Try to buy on a daily or weekly basis instead of waiting for a certain price range. It’s always a safer choice!
In other news, it seems the most recent dip was caused by a huge short-seller who unloaded around 20,000 BTC on the Bitfinex market.
Bitcoin’s sharp correction over the last 24 hours has had a cascading effect on the broader cryptocurrency market. At 60% market dominance, Bitcoin exerts a strong gravitational pull on altcoins and tokens. As a result, Bitcoin’s renewed volatility has knocked billions off altcoin values over the past five days. Of course, that followed a parabolic surge that drove the overall market to a high close to $390 billion.
If a single sell order was responsible for Bitcoin’s sharp correction, then investors can expect a swift recovery in the short term. Bitcoin whales (oversized holders of the virtual currency) seem to have been responsible for at least two major price reversals in recent months. Each time, markets bought the dip and drove the price to new yearly highs.
One of the more dramatic examples of a Bitcoin whale dump occurred in mid-May when prices plunged by more than $1,000 in the span of a few hours. The selloff was caused by a single trader who unloaded 5,000 units of BTC on Bitstamp, a leading digital currency exchange.
It’s expected during bull markets for whales to take profits while Bitcoin rises to new yearly highs. I personally will take these opportunities to accumulate some more coins.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.