Traders fearing the increase in total capital gains tax in the United States have caused crypto to massively drop. An investment manager even notes that sellers probably jammed the whole market as bids started to disappear.
Crypto Market Value Drop
The total value of the crypto market has reportedly declined by hundreds of billions of dollars this Friday but still seems to be recovering nearing the close of the business week, according to a Tweet by CoinDesk. The price of bitcoin reportedly fell over the course of the past 24 hours. The asset reportedly dipped as low as $47,875 at around 4 AM ET according to CoinDesk 20 data.
According to CoinDesk, the price is currently retrenching from the big loss at well around $50,993 when the article was released. Analysts started pointing their fingers towards the government's proposal to double the total capital gains taxes on certain high-income individuals to be the catalyst of this drop.
In an article by Yahoo News, a partner at the investment firm Wave Financial, Constantine Kogan noted his take as of the moment is that the government has something to do with this. Sellers are now probably jamming the whole market and bids started to disappear. US participants are only a portion of the whole market but are probably still the wealthiest both in corporate and retail.
According to a partner at a quantitative trading firm called ExoAlpha, Elie Le Rest, Bitcoin had broken the $50,000 support and is going back to its early March price levels with a whole drawdown of a whopping 25%. Holding firm ground at $50,000 would then confirm the whole accumulated pattern by certain institutional investors at or even below $50,000 leaves room to grow for Bitcoin within the upcoming weeks or months.
Bitcoin Down Cryptocurrencies Up?
Bitcoin had reportedly been in the doldrums for the majority part of the week while other cryptocurrencies started to shine as early as Thursday or April 22. No asset was actually completely spared during the massive recent fall.
The total cryptocurrency market capitalization, as previously provided by the charting software known as TradingView, fell from $2 trillion going to as low as just $1.7 trillion. A massive $300 billion plunge now exemplifies the whole fickle nature of general blockchain-based assets.
April 22 Results
As usual, the liquidations, the total crypto market equivalent of the whole margin call on Wall Street, was the root of the price drop exacerbation. According to the data aggregator known as Bybt, there was over $3.4 billion in the long term liquidations that occurred across all of the different cryptocurrencies over the past 24 hours.
The tumble started late April 22 in the United States equities market with the S&P 500 falling a massive 0.80% by April 22. Shortly after, the US market then closed and Bitcoin started to slide below $50,000.
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Written by Urian Buenconsejo