Bitcoin death cross, Chinese bans send cryptos tumbling
07:28, 22 June 2021
The cryptocurrency market took another plunge at the beginning of this week after China ramped up its crackdown on crypto trading and mining. The move led to a death cross on bitcoin’s price chart, suggesting the start of a prolonged bear market for the world’s leading crypto asset.
The crackdown had less effect on bitcoin than on other cryptocurrencies, however. Its price briefly dipped under the $32,000 level on Monday afternoon (12:30 UTC+1) before bouncing back to over $32,000. On Tuesday morning (7:44 UTC+1), bitcoin was trading close to $32,600, almost unchanged compared to Monday morning, although overall it was still 19% down over seven days.
Other cryptocurrencies continue to be more strongly affected. Ethereum recorded a 24-hour decline of over 3% while many of the other leading crypto coins had double-digit drops - dogecoin was down over 20% in the last 24 hours.
One possible explanation for the different drops is that most altcoins are less liquid and more volatile than bitcoin and ether and, therefore, their price movements are more violent than those of the leading crypto assets.
Most cryptos are down over 50% from all-time highs
Except for bitcoin, which was trading 49.4% lower than its all-time high on Tuesday morning, all the other major cryptocurrencies were already down more than 50% compared to their recent all-time highs.
Ethereum (ETH) was down 55% from its record level in early May and binance coin (BNB) was trading 58% lower than its 10 May high. Cardano (ADA) has held on a little better and was down just 51% from its all-time high on 16 May.
Polkadot (DOT), litecoin (LTC) and chainlink (LINK) were all down by over two-thirds from their mid-May records. Dogecoin (DOGE) lost 72% of its all-time high value.
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Crypto market capitalisation down by over $1trn
The total capitalisation of the cryptocurrency market was just over $1.3trn on Tuesday morning, down from over $2.5trn in the first half of May, according to Coinmarketcap.com data. This is the market’s lowest level since early February.
However, the market value of the world’s cryptocurrencies is still 70% higher than at the beginning of this year and about five times higher than in June 2020.
This means that long-term investors, who went into the market last summer, are still sitting on significant profits.