Bitcoin on Wednesday plunged 31% in the morning, followed by a 33% resurge in the afternoon.
The significant plunge on Wednesday looped billions in value before comments from some prominent proponents helped to fuel a torrid rebound.
The frantic selling had led to outrages on major crypto exchanges from Coinbase to Binance and dominated chatter on Wall Street. Elon Musk tweeted to imply that Tesla wasn’t among the sellers and had held tight during the selloff. A tech entrepreneur, Justin Sun who founded the cryptocurrency platform Tron, tweeted that he purchased $152 million in Bitcoin around a price of $37,000.
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According to ZERO Markets’ Metatrader 4 platform, Bitcoin was trading near $38,000 during early Asia openings. Ether, the second-largest coin, sank more than 40% Wednesday and ended 26% lower.
The recent spike in excessive volatilities in cryptocurrency trading was fuelled by Musk’s reversed plans on accepting Bitcoin for its Tesla cars. Selloffs over the weekend suggested the company want to sell its corporate Bitcoin holdings but reversed his Wednesday’s tweet signaling no intention to do so. A statement issued by the People’s Bank of China reiterated that digital coin cannot be used as a form of payment further added to the selloff.
Despite all the causes, the frantic selloff occurred within a matter of minutes and hasn’t yet be explained. The selling had clearly accelerated when Bitcoin crashed below the 200-day moving average. Traders are now watching whether Bitcoin can break back above the 200-day moving average. If it doesn’t, prices could potentially retest the Wednesday lows near $30,000.
Key events this week (Economic Calendar):
- Australia employment data (Thursday)
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