Flash crash on the crypto market. Why is Bitcoin & Co. going down now?

Today, the crypto market has suffered the first major crash since January 19. The Bitcoin price on Bitfinex dropped from $ 10,250 to $ 9,800 (-4.3%) in a matter of minutes. Many altcoins, especially those that have performed well recently, are minus two digits. These include Bitcoin Cash, Bitcoin SV, Tron, EOS, Tezos, Ethereum Classic or IOTA. Bitcoin is currently trading on the $ 9,900 line.

The price crash came as a surprise, and there seems to be no reason for a sudden sell-off. It can be assumed that some important market participants became nervous and got the sale rolling.

Larger sales after a rally usually result in the following chain reaction. The traders have made profits and want to secure them. To do this, they place stop loss orders. This order type automatically sells a position when the price falls below a certain level. Selling reduces the price and further stop-loss orders are triggered.

No need to be nervous

On social media, you notice restlessness and nervousness. Unfortunately, there is always a small time window. Bitcoin and the entire crypto market have so far seen strong price growth this year. The big cryptocurrencies are still doing very well.

Apart from Tesla, there is no large company in the stock market that could hold a candle to the cryptocurrencies this year. Raw materials such as gold also perform significantly worse. After strong increases, there are always setbacks. The market participants are tense, the uncertainty is great. Nobody can say whether this means a turnaround and a long-term downward trend.

The market is dominated by emotions. These can change quickly. The easiest way to drive is to get basic information about the technology and make your investment decision for a longer period of time. As already mentioned, there is no news to justify the drop. So in the case of a long-term investment, nothing should have changed in the decision.

Good projects continue to work at full speed on their visions and are constantly improving. The mass adoption of blockchain technology is progressing slowly but surely.

As with any investment, risk also plays an important role here. No risk, no chance. Cryptocurrencies are among the high-risk asset classes and there will undoubtedly be many who will lose money in the crypto market. Make sure that you only invest what you can lose, then resets should be easier to endure.

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Also note our disclaimer.

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Posted By

Lukas Mantinger

Lukas is a journalist and blockchain specialist. He has been dealing with the subject for many years and writes reports and reports every day. He is always up to date and, above all, an expert when it comes to technical questions.
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Flash crash on the crypto market. Why is Bitcoin & Co. going down now?