Bitcoin hits three-week low, drops 7.7 percent as sudden selloff

Bitcoin Drops to Three-Week Low, Falls 7.7 Percent Due to Sudden Selling

The cryptocurrency fell sharply on Friday, after a sudden sell-off pushed bitcoin to a three-week low. Bitcoin fell 7.7% to $21,404 (roughly Rs.17,10,700) in a matter of minutes at around 0640 GMT during the European morning. It corrected slightly and then continued to move lower and was trading at around $21,400 (approximately Rs 17,10,400) at 1138 GMT, down 8.2 per cent for the day.

Ether also fell around the same time and fell 8.8 per cent to $1,685 (roughly Rs. 1,34,700).

The reason for the fall is not clear.

“This is not showing a flash crash pattern, as the asset does not immediately rally sharply, but further lower in subsequent hours,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdowne.

“It looks like it was a result of a large sales transaction.”

Streeter said that it appears that cryptocurrency moved first to Cardano, followed by bitcoin and ether, and then others such as altcoins Dogecoin.

Cryptocurrencies have fallen dramatically so far this year, as US Federal Reserve rate hikes and ultra-high inflation prompted investors to abandon riskier assets.

Oanda’s senior market analyst Craig Erlam said that bitcoin’s failure to recover its losses “suggests substance to the move”.

Such sharp moves are common in the highly volatile cryptocurrency market. On June 15, bitcoin fell over 15% as investors panicked over the collapse of the so-called stablecoin, TeraUSD, and a major crypto lender freezing customer withdrawals.

Friday’s move put bitcoin on track for its worst day since the June slump.

“Speculating in cryptocurrencies is extremely high risk and not suitable for most people,” said Streeter of Hargreaves Lansdowne.

© Thomson Reuters 2022


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