Growing market sell-off as a result of large sale-orders has led to the drop in the price of bitcoin – world’s largest cryptocurrency by market value – by more than 20 per cent on Friday.
On the Bitstamp exchange, the cryptocurrency saw a price slash of $6,178, representing a 21.6 per cent drop from the previous close. Total market capitalization, according to newsbtc.com, declined by over $30 billion in 24 hours as a result of mass profit-taking from assets that have been on fire all week. The market had reached a 2019 high of $264 billion on Thursday only to decline $230 billion on Friday morning.
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“We are in a bitcoin recovery phase right now, since the $3100 bottom,” said Vinny Lingham, CEO of blockchain firm, Civickey, on his Twitter handle. “Dips should be seen as good buying opportunities, unless we drop below the $6,200 support level. Watch out for network congestion and fees hurting this run in the mid-term if it moves up too quickly to test $20,000.”
Analysts at Coindesk attempted to explain the big decline on Bitstamp, alluding to a large sell-order of 3,645 BTC or $26.8 million on the Bitstamp exchange. The price drops on other platforms were lower than 21.6 per cent.
On the Bloomberg Galaxy Crypto Index for instance, bitcoin slid as much as 14 per cent, before adjusting it to 5.5 per cent, trading at $7,253 on Friday.
In Nigeria, the price on Luno exchange was at N2.6 million representing a drop from nearly N2.9 million on Thursday.
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“The sudden fall does not appear to have been driven by any particular news item,” Ryan Rabaglia, head of trading at OSL told Reuters. “Rather it looks to be driven by large sell orders by a handful of people or even just one person, who is likely realizing profits after the recent price rise or looking to acquire more at lower prices.”
The cryptocurrency market had heaved a sigh of relief on Thursday when Mark Mobius, a legendary investor and cofounder of Mobius Capital Partners who once referred to bitcoin as a “real fraud”, said the crypto will be “alive and well” in the future.
