After a solid month of bullish trend, the crypto market took a major hit today. In less than 24 hours, the value of the crypto market fell $410 billion where most the digital assets saw double digit losses.
Bitcoin (BTCUSD) dropped below $43000, before getting a bounce and closing a few hundred dollars shy of $47000. Ethereum (ETHUSD) went all the way down to $3000, dropping almost $1000 in less than 8 hours. Ethereum also got a bounce - roughly 40% recovery, a pattern we saw across most cryptos - closing at $3400.
The drop in the crypto market coincided with the adoption of Bitcoin as legal tender by El Salvador, becoming the first country in the world to do so.
When El Salvador launched it's state-run bitcoin wallet, Chivo, it was already dealing with a few technical bumps. Today those issues got exacerbated as the country adopted the digital asset, prompting the President Nayib Bukele to tweet that they were buying the dip, adding 150 bitcoins to their existing number of 400 coins, for a total amount of 550 coins in their treasury.
Cardano (ADA), Litecoin (LTC), Bitcoin Cash (BCH) and all other digital assets where also affected.
Of the cryptos we follow, Solana (SOL) did have a positive bounce, dropping to $130, before turning around and closing above yesterday high at 166.20. Currently price is still in green tagging 180, showing conviction and strength in this coin despite the market scare.
It's also interesting to note that the steep decline came a day after JPMorgan analysts released investor notes "suggesting that the cryptocurrency markets have become bloated again, with market conditions appearing more bubble-like than anticipated".
Today's drop might be the beginning of a correction which means that those digital assets could retest today's lows (and possibly a bit lower). It's a time to wait and see how the El Salvador experiment gets digested and what kind of results come out of it.
During today's crazy ride, Coinbase and other major exchanges experienced delayed or canceled transactions, where closing existing positions was allowed, but opening new positions was not. The glitch did not help the rebound effort and did not boost investors confidence.
Let's see how the market behaves in the next couple of weeks.
Stay tuned. And good trading!
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