Why cryptocurrency fell 30% | Why Bitcoin collapsed.
After a big bull run of 300-500% over the past year, May 19th, 2021 seems to be a big day for cryptocurrency. Almost all cryptocurrencies fell between 20-40%. This created a lot of negative sentiment in the market.
The major reason for the fall:
- China came up with new regulation rules creating a restriction of using not using any cryptocurrency for payment. Since China is developing its cryptocurrency, these comments and regulation from China was the major reason for the fall.
- Musk tweeted about the energy requirement of mining and stopped getting paid using cryptocurrency is another reason. Corporations felt left out of holding cryptocurrency, these drastic correction can make weak people sell their assets. This created opportunity for a corporation and big investors to hold more coins and add more assets at a lower price.
- Crypto investors lost 700 Billion on the 18th and 19th of May in total.
- Even though this kind of fall can cause a serious dent in the crypto believers, this fall is necessary for the crypto bull market to continue. It will remove the lost hands to move out and strong hands to hold more coins.
Fall in Prices:
Bitcoin reached the level of 31,000 and Ether reaches 2,014. All other cryptocurrencies fell 30% from their previous day’s price. Ether lost around 42% of the price from its all-time high in the past 20 days. After reaching an all-time high of 4,200.
The top 10 currencies lost almost 600 Billion in a day and created such destruction of wealth among all small investors who started late in this bull market.
Regain its momentum:
All the major coin came back 7-10% from its low from its fall. Bitcoin came back to 36,000 and Ether trading at 2500 zones.
Crypto markets regained 200 Billion after the fall.
I would suggest investors enter slowly in the market for long time investment and wait for more fall if you are short time investors. Fall of 50% from its peak prices should be an ideal time to re-enter the cryptocurrency market.