A bitcoin flash crash on Monday morning has sent leading cryptocurrencies tumbling, wiping more than $200 billion from the crypto market.
Bitcoin dropped below $44,000 after falling more than 8 per cent in just a few hours, though even these losses were modest compared to its rivals.
Ethereum (ether) fell by more than 10 per cent, while Cardano (ada), Solana (SOL) and dogecoin all fell by more than 13 per cent.
Salvadoran President Nayib Bukele tweeted that he used the market crash as an opportunity to “buy the dip” and add to El Salvador’s stockpile, however some analysts warned that the latest price dip could form part of a longer term trend.
Other experts remain convinced that any short term volatility will ultimately be forgotten as bitcoin rises to new all-time highs in 2021.
You can follow all the latest news, updates and expert price predictions in our live blog right here.
Bitcoin is ‘cyberspace bank’ serving the unbanked
One reason for El Salvador’s president, Nayib Bukele, to “buy the dip” today is because he sees the long-term potential of the cryptocurrency in countries such as his.
Just two weeks after El Salvador officially introduced the Bitcoin Law, which officially made the cryptocurrency legal tender, more than 1.1 million people are already using it as a day-to-day currency. That’s roughly one sixth of the country’s population that didn’t previously have access to traditional financial services.
“It seems that we will be able to bank more people in one month, than they did with nationalisations and privatisations of traditional banks in 40 years,” President Bukele said.
It prompted another staunch believer in bitcoin, MicroStrategy CEO Michael Saylor, to praise bitcoin and the stance El Salvador has taken. As the largest corporate investor in bitcoin, with billions on its balance sheet, it wouldn’t be surprising to learn that Saylor is also buying the dip.
Anthony Cuthbertson20 September 2021 20:06
Bitcoin in ‘greatest buy zone in history’
Many long-term bitcoin holders are using today’s price crash to push the “buy the dip” narrative in the hope that it will bounce back stronger.
Bitcoin podcaster Cedric Youngelman even goes as far as describing it as “the greatest buy zone in history”.
Other traders are offering a more cautious view on the market, with bitcoin author Glen Goodman describing it as “choppy hell” that is too risky to call either way.
“This is why most of my money remains on the sidelines, waiting for better opportunities,” he says.
Anthony Cuthbertson20 September 2021 17:34
Bitcoin price stabilises?
The price of bitcoin appears to have stabilised at around $44,000 following the series of flash crashes earlier in the day that saw it drop from above $48,000.
Other leading cryptocurrencies also seem to have levelled out, with Ethereum (ether) just holding above the $3,000 mark and dogecoin managing to keep above $0.20.
Which way it goes from here depends on who you ask, with many bitcoin maximalists backing up Salvadoran President Nayib Bukele by claiming that now is a great time to “buy the dip” in anticipation of future price gains.
Anthony Cuthbertson20 September 2021 17:00
Bitcoin sees huge interest from institutional investors
One thing that has been interesting about major bitcoin price crashes in 2021: each low has still been way above any previous high seen in 2020 or earlier.
One reason for the lows being not as low as those in the past is that bitcoin is now bolstered by massive institutional investment. New research from Fidelity Digital Assets has found that 52 per cent of institutional investors now hold bitcoin or other cryptocurrencies
We’ve heard from Simon Peters, a market analyst at the online trading platform eToro, who explains what this means for the overall crypto space.
Anthony Cuthbertson20 September 2021 16:41
Bitcoin price pattern mirrors 2013 and 2017
The counter argument to the ‘dead cat bounce’ theory from the last post is that this bitcoin price crash is just a blip amid a record-breaking bull run.
Similar dips were seen in 2013 and 2017 in the run up to new all-time highs, and some analysts have pointed to “consistent” market patterns this time around.
Bullish analysts believe the peak of this current cycle is above $100,000 – way above the $64,000 price record seen earlier this year – and that it will be hit before the end of 2021.
Currently at around $44,000, bitcoin has a lot of climbing to do if it’s to achieve that.
Anthony Cuthbertson20 September 2021 15:29
Bitcoin price crash ‘dead cat bounce’ completed?
The latest price crash has divided bitcoin analysts over whether this is the beginning of a longer-term downward trend, or just a blip on the way to new all-time highs.
According to the pseudonymous Mr Whale, who has racked up more than a quarter of a million Twitter followers with his largely pessimistic predictions, the recent price gains were part of a “dead cat bounce” price pattern.
This is where the price rebounds during a bear market, before continuing…
Read More: Bitcoin news live: Price flash crash triggers market-wide chaos