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Why did Bitcoin lose half of its value yesterday?

US, WASHINGTON (NEWS OBSERVATORY) — Bitcoin deepened its plunge last night, dropping to a low of $ 4,000, the lowest in a year.

Recall that BTC / USD started yesterday just under $ 8,000. Bitcoin had therefore lost half of its value at last night’s low.

The cryptocurrency has certainly risen since, currently moving towards $ 5,330 this Friday morning in Europe, but it still displays a loss of almost 30% over 24 hours.

No news from the cryptocurrency industry justified this move.

The only explanation for this brutal fall is to be linked to the rout of the equity markets, which had one of the worst days in their history yesterday, with a plunge of more than 12% for the CAC 40 , and almost 10% for the main US S&P 500 and Dow Jones indices .

The theory is that investors and portfolio managers liquidate their hedging positions and their “alternative” positions to cover margin calls linked to the fall in stocks.

This theory is also verified on Gold, which fell yesterday despite the plunge in the stock market, while the yellow metal generally emerges as a big winner each time the stock market panics.

From a technical point of view, the volatility is such that only the major psychological thresholds should count. Thus, the first support is at $ 5,000, before $ 4,000, while the first significant resistance is located at $ 6,000.

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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.

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