Bitcoin is no doubt the largest cryptocurrency in the world. Its price has a major impact on the prices of other cryptocurrencies such as Ethereum even though they have different features. Over the last two weeks, we have noticed a sharp increase in price of Bitcoin across all exchange platforms.
Bitcoin Prices Suddenly Drop
Over the last couple of weeks, Bitcoin price has been increasing steadily and thousands of traders moved with speed to capitalize on this bullrun. However, the prices drop from above $8,000 to $7,215 in less than one day. Notably, the cryptocurrency only traded above $8K for less than a day.
The 10.1% drop in price in less than 24 hours is one of the largest drops in such a short span of time. As mentioned earlier, price of bitcoin has a direct impact on the rate at which other cryptocurrencies trade globally.
During the same period, the price of Ethereum dropped to $241.33 while XRP plunged to $0.399378. The price of the latter dropped by 15.4% while that of Ethereum dropped by 7.97%. Another report by Coinmarketcap.com shows that in the 24 hours that the bitcoin price dropped the total market capitalization of the global crypto industry dropped by 8%. More than $21 billion was wiped out in only 24 hours.
What Caused the Drop in Bitcoin Price from $8K
Experts are of the idea that the last drop in the price of bitcoin was as a result of the combined impact of algorithmic trading compounding the swift fall and traders profit taking. They also say that steep drops and rises will continue for the next couple of days and weeks until the institutional investors increase the market volume.
Key Lessons from Bitcoin Price Plunge
One of the key lessons that every cryptocurrency investor should learn from this sudden bitcoin price plunge is that with every surge in price, the overall investment in the cryptocurrency and interest in the market increases. More people will take the trend positively and start to think about the potential and chances of blockchain being adopted and used at a large scale.
Increase in interest especially from retail investors will definitely result in an increase in prices of not only Bitcoin but also other prominent cryptocurrencies. It will be remembered that back in 2017, the frenzy of interest in cryptocurrencies from investors ramped the prices to an all-time high. Up to date, the industry is still trying to get to that level again.