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On Sunday, April 18, the crypto market fell sharply by almost 8%. Bitcoin dropped 10,000 dollars to 52,000 dollars. Altcoins such as XRP, which had risen sharply in the previous days, fell back painfully.
The week had started with records. Bitcoin, Ethereum and other major cryptocurrencies were setting new records in terms of valuation. Altcoins were also benefiting greatly from the trend.
One of the reasons for these sustained increases was the April 14 IPO of Coinbase. However, this momentum continued afterwards. XRP, Dogecoin and Bitcoin Cash were all on the rise.
Until Sunday, April 18. The crypto market suffered a brutal correction. The global capitalization sank by almost 8% to just over $2 trillion. The value of BTC illustrates this phenomenon.
Bitcoin lost nearly $10,000, dropping from $61K to just $52K. And that plunge was taking the rest of the market with it. Ethereum, which peaked at over $2,300, fell back below $2,000.
However, a rebound occurred later in the day. And it has been going on ever since. On April 19, Bitcoin was trading at about $56,600. ETH is at just over $2,200. The big winners of the past weeks are not left behind.
XRP, for example, is at $1.50. By 1pm yesterday, it had fallen back below 1 euro, only to resume a growth path. Same trend for DOGE at over $0.30 at the time of writing.
It is the sudden plunge of Bitcoin that alone could justify this correction. And it was leading to a lot of selling and saturation of the exchanges and the blockchain. Transaction fees even exceeded $45.
Our colleagues put forward several tracks to explain this phenomenon. Rumors on Twitter suggested that the government could launch measures on the crypto market to fight against money laundering.
Others, like Willy Woo, report a major electrical incident in China. This outage would have resulted in a number of mining equipment becoming inactive. The hash rate has indeed dropped suddenly.
But what is the relationship between hash, the computing power needed to mine and process operations, and the price of BTC? None, according to Adam Cochran, partner at Cinneanhaim Ventures.