empty
13.05.2021 03:49 PM
BTC collapsed by 15%: what will happen to the asset and the market next

Bitcoin has been in uncertainty for more than two weeks due to a significant oversaturation of the asset, as well as attempts to consolidate prices and overcome the $60,000 mark. Throughout this period, the market was in a wait-and-see position. BTC/USD quotes reacted poorly to positive news impulses, and attempts to break through the psychological boundary were unsuccessful. Therefore, the increase in the institutionalization of the asset stopped, and market participants expected an impulse that would allow the cryptocurrency to overcome $60,000 or cause a correction.

The momentum turned out to be negative, and the main cryptocurrency fell by 15% over the past day. The total capitalization of bitcoin collapsed past the $1 trillion mark, and the daily trading volumes exceeded the $100 billion mark. This can drastically affect the balance of power in the cryptocurrency market, as well as aggravate the bitcoin correction. But first, let's look at the reasons for such a sharp collapse. First of all, this is due to the most widespread and publicly available news: Elon Musk said that Tesla stops accepting bitcoins as payment for its products. This is due to the excessive consumption of electricity for mining the first cryptocurrency. Various US officials and public figures have spoken about this lack of assets.

This image is no longer relevant

In addition to the short-term extremely negative effect, such a statement can become a significant reorientation of the market to more stable assets in terms of production. And the April test transaction of the merger of ETH 1.0 and ETH 2.0, thanks to which electricity consumption decreased by 99%, came to an end. In the near future, there are no updates in the bitcoin network related to the mining process or a reduction in energy consumption during transactions. Given Tesla's suspension of cooperation with BTC, the attitude of institutional investors to the asset will become more wary. Large companies may perceive the combination of these events as a signal for the sale of the cryptocurrency, which can collapse the entire market.

An additional factor that exacerbated the fall in bitcoin was the collapse of the US stock market. The unfavorable economic situation, as well as the increasing unpredictability of the situation around BTC, caused a significant decrease in interest from large companies. An outflow of retailers is also expected, who have lost $4 billion over the past day. Due to the collapse of bitcoin quotes, long positions of 430,000 users of crypto-exchanges were liquidated, and the largest loss of one trader was $38 million. The situation was also aggravated by the achievement of a total cryptocurrency market capitalization of $2.5 trillion. In the coming days, a technical correction of all cryptocurrencies is expected, associated with the achievement of a new indicator, however, the collapse of bitcoin exacerbated the situation for all crypto assets.

It is extremely difficult to predict the further development of events since the market reaction is important at this stage. If the community perceives Musk's announcement and the suspension of cooperation with bitcoin as a fundamental and final decision, then a significant sell-off could occur, which will also cover altcoins. As of 10:00 UTC, bitcoin is quoted at $48,500, but the current price dynamics is negative. The asset will likely drop to $43,000-$44,000, where the main support level is. All other things being equal, without a flow of negative news, a change in the bearish trend may occur at these levels, which for the next few days paralyzed the market with a stranglehold.

Artem Petrenko,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

US Market News Digest for April 22

The S&P 500 and Nasdaq 100 continue to slide as mounting concerns over slowing economic growth and the impact of trade tariffs weigh on sentiment. The market remains volatile, with

Ekaterina Kiseleva 11:13 2025-04-22 UTC+2

Trump, Fed, and gold at $3,000? Markets respond to alarming signals

Investors are worried about the Fed's independence under Trump. US assets are falling, and the dollar is at a three-year low against the euro. Safe-haven currencies like

11:46 2025-04-21 UTC+2

US Market News Digest for April 21

The S&P 500 and Nasdaq slipped once again after Donald Trump lashed out at the Federal Reserve. His comments called the independence of the central bank into question, amplifying inflation

Ekaterina Kiseleva 11:41 2025-04-21 UTC+2

Trump, Fed, $3,000 Gold? Markets React to Red Flags

Investors Worried About Trump Fed Independence US Assets Fall, Dollar Hits Three-Year Low Against Euro Safe-Haven Yen, Swiss Franc Rise Gold Hits New Record High South Korea Stock Market

Thomas Frank 10:18 2025-04-21 UTC+2

US Market News Digest for April 18

Donald Trump ratcheted up his criticism against Federal Reserve Chairman Jerome Powell, once again calling for an immediate interest rate cut. This renewed political pressure adds to the tensions surrounding

Ekaterina Kiseleva 12:09 2025-04-18 UTC+2

When Giants Fall: How Alphabet and UnitedHealth Decisions Hurt the Market

Trading on U.S. stock markets ended in disarray on Thursday, with positive news from tech giants and pharma companies colliding with interest rate concerns. Market participants wavered between hopes

Thomas Frank 11:56 2025-04-18 UTC+2

Powell in danger? Can Trump fire Fed Chair and what does that mean for markets?

Donald Trump has once again set his sights on the Federal Reserve, accusing its chairman Jerome Powell of failing in monetary policy and threatening to fire him. But what lies

Аlena Ivannitskaya 08:43 2025-04-18 UTC+2

US Market News Digest for April 17

Jerome Powell's latest remarks triggered a sharp sell-off in US equities. Both the S&P 500 and the Nasdaq posted notable losses after the Fed chairman said that interest rates

Ekaterina Kiseleva 11:21 2025-04-17 UTC+2

When it all went wrong: Nvidia under pressure, stocks fall, Powell waits for clarity

Powell says economy slowing in Q1, may wait for more clarity European stocks slip ahead of ECB policy decision Nvidia warns of blame over US chip export restrictions to China

Thomas Frank 10:27 2025-04-17 UTC+2

US stock market in red zone: Dow Jones – 0.4%, Nasdaq – 0.1%. Upbeat corporate reports do not save Wall Street

The US stock market closed Tuesday with minor losses, as uncertainty over trade duties continued to weigh on investor sentiment. Consumer and healthcare stocks were particularly affected, though strong earnings

11:38 2025-04-16 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.