Bitcoin Crash: Why $600 Billion wiped out in huge Crypto crash?

The crypto bubble that caused the value of Bitcoin to surpass a trillion dollars and add billions of dollars to mindless digital coins overnight is exploding. Bitcoin crash nearly 22% to $ 35,000, erased more than $500 billion in value from the bitcoin’s highest market value. After Tesla announced on February 8 that it would use the company’s cash to buy assets and accept it as a vehicle payment method, the bitcoin value wiped out after a huge record gain. Due to the Cryptocurrency crash, Etherium, the second largest coin fell more than 40%, and Dogecoin lost its worth about 45%.

Bitcoin price is now less than 50% from a record high of nearly $65,000 in April this year. Tesla CEO Elon Musk has added to the confusion and his comments on social media have driven the cryptocurrency community into chaos. A statement issued by the People’s Bank of China on Tuesday reiterated that digital tokens cannot be used as a payment method to increase sales.

#Cryptotrading is a top trend on Twitter, with critics and fans alike getting a tenth of the attention from this loss. Critics warn that the crypto asset movement is unsustainable and any sell signal will lead to defeat.

FRNT Financial CEO and Co-Founder Stephane Ouellette said: “For many new entrants, this will be the first day of ‘welcome to crypto’.”

The chart watcher points to the key technical level of failure.

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Image credit: Bloomberg

In Gland, senior analyst Ipek Ozkardeskaya said  “From a technical point of view, the indicator flashes red,”. “The next major support level is around $ 37,000, and then $ 30,000. At least in the short term, we can see a rise to these levels or even lower.”

Due to the Crypto crash, all the related stocks also fell, with Coinbase Global Inc. falling 5.2% in pre-market trading in the US and falling 12% in Marathon Digital Holdings Inc.

Musk’s Role in Bitcoin crash

Chief Tesla has become a Svengali-like character in the world of cryptocurrencies due to his cryptic posts. Following the announcement of Tesla of accepting bitcoin for its cars in February, Bitcoin rise to a high of $64,870, mainly due to support from the company.

At the time, the acceptance of Tesla was hailed as a turning point for the bitcoin value. Many in the crypto community took it as another step in the development of the btc price.

After Musk criticized Bitcoin’s energy use last week, Musk began a series of puzzling tweets that made investors dizzy. All of this was the result of the Bitcoin crash.

He announced that Tesla will suspend the use of bitcoin to buy cars. Last weekend, after suggesting that his electric car company may have sold its bitcoin holdings, he tweeted to clarify that it was not. All of this confuses traders that also affected btc prices.

Ulrik Lykke, CEO of crypto hedge fund ARK36, said: “In fact, this is not the first time Elon Musk’s tweets have been shaky. Frankly speaking, this is wrong.” “The crypto market is driven emotionally. Participants tend to overreact to events that they consider negative.”

We have also discussed Why is crypto down, do check it and share your views in the comments.

Article Source:  Aljazeera

 

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