Some altcoins have lost more than 20% within a few hours. Only two cryptocurrencies in the top 20 fell less than 10% in recent days.
The pandemic of the new coronavirus or COVID-19 has led to a situation that markets still resent. Bitcoin, the main cryptocurrency, has lost more than 14% within 24 hours and, after a slight rebound, it is currently in the vicinity of USD 4,850.
Data from CoinMarketCap indicate that, at the beginning of the period described above, the price of BTC was above USD 5,300 and fell to USD 4,612. In other words, the fall has caused Bitcoin to lose almost USD 700 in its price within a day. The decrease is even greater, considering that Bitcoin recently reached above USD 5,800 at its highest point.
Recently, the main altcoins have also suffered a significant within two days. The top 20 includes all cryptocurrencies with a market capitalization greater than USD 400 million. This list shows that Tezos (XTZ) has been the most affected, with a 28% drop, followed by ChainLink (LINK), with a 27% fall.
Among the most recognized in the market, Ether (ETH) shows losses of more than 15%, close to USD 106, its lowest point so far in 2020. Meanwhile, Litecoin (LTC) has fallen by 14% and Monero (XMR) has lost nearly 20%. From that list, only Huobi Token (HT) and Unus Sed Leo (LEO) have depreciation rates of less than 10%.
The recent movements of the market have changed the positive trend that Bitcoin had earlier this year, along with the expectations of the halving, the next reduction of mining rewards by half. Therefore, BTC has fallen below its “fair value” just for the fourth time in its history. That metric, developed by analysts at Coin Metrics, establishes a relationship between market capitalization and the initial price of unspent or “hold” coins.
General Fall of Markets
Last March 16th, for example, saw a further general decline in the main markets. Oil prices add to cryptocurrencies, with the WTI barrel, the main reference in the US market, falling below the USD 30 mark, with a 7% drop. Besides, the OPEC basket and the Brent fell by more than 6% within a few hours.
The further decline in the markets even affected gold with about 3% of value loss. Currently, the precious metal is trading at less than USD 1,480 per ounce, whilst silver has lost more than 10% of its price, standing at USD 12.77 per ounce. The indices from stock markets in Hong Kong, China, Japan, United Kingdom, and the European Union have also suffered significant losses in this context.
All this behavior of the markets occurs after the US Federal Reserve (Fed), and various central banks worldwide after it, announced an emergency easing of its interest rates, in addition to a bond policy for about USD 700,000 million.
In response, investors have chosen an exit to less risky assets and actors involved in Wall Street have questioned the actions of the Fed. For example, the head of the market strategy at the firm JonesTrading, Michael O’Rourke, considered that the Fed “panicked” and the market is “afraid” accordingly.
By Willmen Blanco