A massive crypto market sell-off has vaporized $50 billion – over 22% of its total market capitalization – in the last 24 hours. The total crypto market value dropped from $220 billion to $170 billion, with Bitcoin plunging 20% from $7,395 to below $6,000 in a move that has wiped out all of its gains in 2020.
The plunge happened so fast that the ink is barely dry on a fresh prediction from BitMEX CEO Arthur Hayes, who said he expected BTC to reach “max pain” by dropping to the $6,000 range.
Bitcoin has already dipped as low as $5,895, according to CoinMarketCap, reaching levels last seen in April of 2019.
BitMEX, the largest crypto derivatives market, has liquidated more than 825 long positions worth $782 million on its XBT contracts as global panic continues to rip through the markets over the coronavirus outbreak.
Despite the fear, uncertainty and doubt, Hayes says he remains optimistic.
“As central bank printing presses switch into beast mode, Bitcoin should enjoy a nice run back through $10,000 towards $20,000 by year end.”
The rapid descent sees the world’s leading cryptocurrency, as well as the entire market, mirroring big movements to the downside by all of the major equities indexes.
All US stocks halted trading for 15 minutes as the S&P 500 plunged 7% and triggered a market-wide circuit breaker. The Dow Industrial Average, on track to post another historic day of losses on Thursday, also plunged as much as 2,200 points or roughly 9%, in volatile trading.
To stop the bleeding and counteract the economic fallout from the coronavirus, the Federal Reserve is intervening with an initiative that will pump $1.5 trillion into the financial markets, reports CNBC. The Fed will ramp up asset purchases starting on Thursday “across a range of maturities”, including Treasury Inflation-Protected Securities, bills, notes and other instruments.
With the financial system on life support, the Fed’s cash-pump intervention will last through April 13th. According to the report, a whopping $500 billion will be spent in a three-month repo operation on a weekly basis, with at least $175 billion in overnight repos and $45 billion in two-week operations.
Crypto traders are looking to traditional markets to see how macro events and the market tumult will continue to impact the price of Bitcoin and crypto trading at large. Following the Fed’s announcement and the Dow’s uptick, Bitcoin rose slightly from $6,033 to $6,130. At time of writing, BTC is currently down 20.76% over the past 24 hours, according to data compiled by CoinMarketCap.
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