After Bitcoin was introduced as the official currency in El Salvador, the Bitcoin price plummeted. According to CoinMarketCap, the price of the coin dropped from $52,000 to below $44,000 on Tuesday, September 7th. Since then, it has recovered slightly and is now trading above $46,000.
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The crash of the Bitcoin price affects the entire crypto market
Amid the crash, several other cryptocurrencies also suffered losses. These include Ethereum, Cardano, and Binance coins. Crypto analyst Glen Goodman tweeted: “Terrible charts for BTC and the rest of the crypto market.” He also posed the question: “Bitcoin just bounced cleanly off the previous resistance line. Is this a retest of that line or the start of something much worse?”
The crash erased hundreds of billions from the market, which was worth over $2.35 trillion at the start of the day.
Massive problems with crypto exchanges
The situation caused millions of traders to cash out their assets or buy into the price drop. After this, crypto exchange Coinbase had massive problems with transactions and app errors.
The company stated: “We are aware is that transactions are currently experiencing increased delays or aborts. Our apps can also run incorrectly.”
The problems caused panic among many merchants. But things are slowly calming down again.
The cryptocurrency market is now worth about $2.15 trillion and has suffered a loss of $20 trillion. That’s still much higher than the lows of about $1.3 trillion recorded in July.
Earlier coin forecasts saw Bitcoin on a path toward $100,000 or more by the end of 2021. However, less positive forecasts predicted that the coin will see annual lows below $20,000. According to Dutch analyst PlanB, Bitcoin is in the midst of a “dead cat bounce.” In his opinion, it will lead to annual lows.
Bitcoin experienced the biggest drop, but the entire crypto market was affected. According to many analysts, this gives an insight into the volatility of the market. This could shape the future of crypto trading.
Market leaders Ethereum and Cardano also saw big losses after Bitcoin crashed. The price of Ethereum has fallen from about $3,951 to $3,062 in the last 24 hours. It is now at $3,359. Cardano fell to $2.02 in the meantime and is now at $2.36. This represents a 17.16% drop from previous highs.
Meanwhile, crypto prices are on the rise again. But the bitcoin price is still far from last week’s highs. This sudden price correction is likely to cause concern among Salvadorans, who must now accept the coin as legal tender.
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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