Sunday’s Flash Crash Brought the Crypto Market Low, So When Do the Bulls Take It Back?
Crypto Market, On Sunday, the 21st, Bitcoin fell from $59,897 (BTC/USD) to $57,483, and it has continued to fall since then. This sudden downward turn affected cryptos across the board. Ethereum (ETH) dropped from $4,414 to $4,166 in the same period. All the way down to Theta (THETA) and Tixl (TXL); the repercussions were felt, sending a ripple through the crypto market.
What Caused the Crypto Market Crash?
Analysts are proposing a number of factors that could have contributed to the crash; there are definite comparisons between Sunday’s crash and October’s 27th flash crash. Like that drop in October; analysts expect Sunday’s price drop was due to market speculation. Too many people buying too much crypto too quickly meant that the bubble had to burst at some point.
Back in October, we saw a turnaround within a few days, and for this crash, we’ve already seen some cryptos turn the corner. Ethereum in particular is already nearly back up to its Sunday high. Just yesterday, it hit $4,379, very close to the $4,414 it enjoyed before the drop.
Other cryptos are still struggling to play catch-up. Bitcoin is at $57,851 today and not looking like it is going to get back to Sunday’s mark very quickly. Tuesday night, it fell to the lowest rate this crypto has seen since October 13th. Most cryptos- from the top to the bottom- are still down from Sunday.
It’s not just speculation that led to this crash, though. Analysts are guessing that profit-taking for the end of the year has something to do with it as well; as investors are pulling out of cryptos before the price drops so that they can get back what they put in; as well as any profits they might have made. Now is the time of year where companies are looking to make their books look good, balancing out their accounting before the new year rolls around.
That brings with it some rising pressure to sell, but not just for businesses. A lot of investors are seeing the writing on the wall that Bitcoin will likely go down for a while following its recent new all-time high. The market recently experienced some incredible highs that seemed artificial to most analysts, so there is definitely pressure to pull out for a while. Many investors are looking to put their money back in once the market looks like it is ready for a turnaround again, but when might that happen?
When Does It Turn Around?
A lot of the impetus for a bullish trend will be on Bitcoin’s shoulders. That is where investors will be looking if they want to see where the market is headed. With more than 40% of the market share currently, Bitcoin drives the crypto market in a huge way.
It’s wise to look at Ethereum as well. Its positive movement bodes well for the larger crypto market; and it could definitely pull some other cryptos up with it if it continues to rise. Binance and a few others are up as well, even though they took a hit like everyone else on Sunday evening. With a lot of cryptos ending up in the red still after the Sunday bloodbath, including Solana; the market still has a lot of recovering to do before it is in the clear from this week’s opening crash.
