TL; DR Breakdown:
- The global crypto market is down more than 17% since yesterday.
- Live trading data indicates a large-scale sell-off in the last 24 hours.
- The collapse was triggered by panic sales due to several recent events in the industry.
The global cryptocurrency market is down more than 17% in the last 24 hours. While experts anticipated a crypto market crash in December, the scale above 10% was significantly surprising to most investors. We entered the bear market in early November and the bulls occasionally pulled back early last week due to some major announcements from metaverse projects surrounding cryptocurrencies.
However, the rise in FUD around the new Covid variant and the stock market crash has caused cryptocurrency prices on the market to drop below their predicted support zone.
A summary of what is happening in the market today
Bitcoin prices have plunged below $ 50,000 for the first time in 2 months. Bitcoin was trading at around $ 43.5K today, its lowest level since September. Since then, BTC has risen back to the $ 47K zone.
However, the biggest surprise was Ethereum. ETH is down almost 15% in the last 24 hours. the altcoin It showed tremendous support above the $ 4K range during the November bear market, but fell to $ 3,497 today, its lowest level since September. Since then, ETH has slowly risen back to $ 3.9K.
Litecoin took the biggest hit among the top 20 cryptocurrencies, as the altcoin is down more than 25% in the last 24 hours. The Metaverse Sandbox (SAND) and Decetraland (MANA) coins also took a hit above 20% in today's drop.
Let's see what is actually causing the crypto market crash today.
The exchange reserve increased considerably
The reserve of all exchanges is a metric that shows the total amount of crypto that is held in centralized crypto wallets. There has been a sharp rise in both BTC and ETH, all exchange reserve flows. This means that more investors are depositing their cryptocurrencies for fiat withdrawal, suggesting a high liquidity rate and cryptocurrency sell-off.
Estimated leverage ratio reached all-time high
The Estimated Leverage Ratio indicates the average amount of leverage used by crypto investors. As a leverage ratio for both Bitcoin and Ethereum reached an all-time high yesterday in the Binance exchange, indicates that cryptocurrency traders currently have a high-risk sentiment towards trading. Again, this has led to a large-scale sell-off since yesterday, causing the cryptocurrency market to crash.
Exchange Whale Ratio reached a three-year high
At the beginning of last week, the share of BTC's trading whales jumped to 91%, a three-year high. The Whale Trade Index indicates the approximate size of the top 10 deposits compared to the total volume of deposits across all exchanges.
When the ratio reaches significantly more than 85%, it indicates a massive spill, suggesting that the whales are liquidating their crypto assets. Also, when the whale trade rate increases, it creates fear among relatively small investors.
Crypto market crash is largely triggered by panic selling
Overall, the key trigger behind today's crypto market crash is panic selling. Earlier this week, the American billionaire investor Charlie Munger lashed out at cryptocurrencies, saying he wishes crypto had never been invented.
He too $ 10 million BadgerDAO hack and India's crypto regulation The plans contributed to the panic selling. There were also concerns about the new Covid-19 variant, which could negatively affect the global financial state that is still trying to recover from the pandemic.
Although veteran and seasoned investors are not wiped out by such events, new investors are easily caving in to the FUD, resulting in a large-scale crypto sell-off. However, not everyone sees the cryptocurrency market crash as a negative event. The CEO of Tron and El Salvador has already bought the dive, adding more Bitcoins to your crypto wallets.
Some experts are also indicating that today's crypto market crash resembles the bull market pattern of 2017, which then saw Bitcoin and other altcoins skyrocket. For now, it's time to sit back and assess, as the cryptocurrency market appears to be sinking even further over the weekend.
