Cryptocurrency markets are correcting heavily as the week draws to a close following Bitcoin’s rapid decline below $30,000 a few hours ago. However, the $30k zone must hold, and at the time of writing, Bitcoin had reclaimed it to trade at $31,300 levels.
Over $150 billion has been wiped out from digital asset investments over the past 24 hours or so. Total market capitalization has declined from just over a trillion dollars down to around $840 billion a few hours ago, according to Tradingview.com.
Bitcoin leads the slump
Bitcoin lost around 15% in its largest daily drop for well over a year. From an intraday high of a little over $35,000, the asset plunged over $6,000 to settle just below $29,000 marking a full correction of 30% from its all-time high on January 8.
Previous bounces down have led to lower highs on recovery, indicating that the correction is not over yet. A break below current levels could see the asset retreat as much as 40%, which puts it back at the $25k level.
Long term investors and Bitcoin whales such as RT’s Max Keiser were unperturbed and saw the move as a buying opportunity;
“I’ve been through three 90% corrections in Bitcoin since 2011. This 30% drop doesn’t phase me one bit. In fact, it’s fun.”
China’s industry insider, Dovey Wan, suggested that it could be the Chinese New Year effect which traditionally causes a dump at this time of year as money is needed for the holiday period. She suggested that it could fall as low as $23k in this dip;
‘PlanB,’ the brainchild behind the famous stock-to-flow model, was also unconcernedly pointing out that the long-term price model is still on track, even with this current correction.
“$31.5K bitcoin feels low compared to $40K … but did you really expect BTC price to front-run S2F model already? S2F model is right on track, like clockwork. Patience!”
Elsewhere on crypto markets
Bitcoin is known as the pied piper of crypto for a reason as the rest of the market blindly follows its moves. All of the altcoins are a sea of red at the moment, with many of them also dumping double digits on the day as cryptocurrency trading takes a massive hit.
Ethereum has lost 10% in a fallback to $1,150, but it is still hovering around its highest prices. Polkadot, which recently flipped XRP in market capitalization, has largely escaped the pain with a minor retreat keeping it above $16, while XRP has dumped 9%, declining to $0.26.
Other altcoins in massive pain today include Cardano, Bitcoin Cash, and Monero.