Bitcoin (BTC) has steadily declined since hitting a new 2019 high of $8,365 on Wednesday, dropping to $7,800 by 10 p.m. Eastern time yesterday. Bitcoin (BTC) then experienced a flash crash, dropping as low as $6,200 on Bitstamp, an astonishing $1,600 crash within minutes.
Apparently, this flash crash was triggered by a whale dumping $35 million of Bitcoin (BTC) at one time on Bitstamp. It was clear that the crash originated on Bitstamp because Bitstamp was at $6,200 when Bitfinex was still trading at $7,100. BitMEX uses Bitstamp in its price index, so when the price on Bitstamp crashed, it liquidated numerous long positions on BitMEX. This is called a long squeeze and resulted in even more Bitcoin (BTC) being dumped.
Bitcoin (BTC) bounced back shortly after the flash crash, reaching $7,400 at midnight. Bitcoin (BTC) did not return to its price from before the flash crash due to all the damage done from liquidated longs.
It is possible that the whale who dumped $35 million of Bitcoin (BTC) at once was trying to manipulate the market to profit on a short position. This is just speculation, but it is unusual to force the price of Bitcoin (BTC) downwards so quickly instead of selling slowly. The whale lost millions of dollars due to the way they crashed the price all at once.
Today the price of Bitcoin (BTC) has been slowly declining on average and is currently trading near $7,100. It appears Bitcoin (BTC) is stabilizing near this level. Bitcoin (BTC) has local support at $6,900 and resistance at $7,200-$7,300. The longer term resistance level is $8,300-$8,400, which was Bitcoin’s (BTC) high for 2019.
Major cryptocurrencies are deep in the red today with numerous major cryptocurrencies down over 10%. Ethereum (ETH) is down 10.6%, Ripple (XRP) is down 10.4%, Bitcoin Cash (BCH) is down 11.1%, Litecoin (LTC) is down 8.9%, EOS is down 10.1%, Binance Coin (BNB) is down 4.8%, Stellar (XLM) is down 12.6%, Cardano (ADA) is down 11.3%, Tron (TRX) is down 8.1%, Monero (XMR) is down 9.3%, Dash (DASH) is down 12.4%, Tezos (XTZ) is down 2.5%, IOTA (MIOTA) is down 8.3%, Bitcoin SV (BSV) is down 11.7%, and Dogecoin (DOGE) is down 11.2%.
Due to the significant losses across the board on the crypto market today, the total crypto market cap has declined from $246 billion to $224 billion, a loss of $22 billion. The total crypto market cap has lost $40 billion since hitting a new 2019 high on Wednesday. That being said, the total crypto market cap is still 124% above the bear market low of $100 billion in December.