The massive sell-off in the stock market on Wednesday is the cause of the dump in the cryptocurrency market, analysts say. Asia seems to play a large part in the sudden price drop of Bitcoin and any other coin.
The dump began shortly after the opening of the Tokyo Stock Exchange, and since the start of the drop $16 billion has gone up in smoke in the crypto market. Bloomberg tech reporter Yuji Nakamura says on Twitter that he is hearing that 'Japanese day traders are leading the move lower, selling crypto to pay for unexpectedly big margin calls in stocks'. Yesterday, the Dow Jones dropped 832 points.
Crypto getting spanked this morning in Asia. Hearing that Japanese day traders are leading the move lower, selling crypto to pay for unexpectedly big margin calls in stocks. Question is will Bitcoin @ $6,000 hold? pic.twitter.com/L3bQDZTZFr— Yuji Nakamura (@ynakamura56) October 11, 2018
Crypto reporter Joseph Young adds that this is a plausible explanation for the dump, with 'huge volumes' at crypto exchanges in South Korea and Japan.
It is plausible that investors and traders in Asia have contributed quite largely to the drop in the price of Bitcoin today.— Joseph Young (@iamjosephyoung) October 11, 2018
The volume of crypto exchanges in South Korea and Japan (Bithumb, Bitflyer) are huge. https://t.co/1nAHd9BezV
In an interview with Bloomberg, Ryan Rabaglia, head of trading at cryptocurrency dealing firm OSL in Hong Kong, says that 'the global sell-off in equities has indeed spilled over to the crypto space. The days of crypto being the safe haven play and having a high degree of detachment from the rest of the world are seemingly diminishing.'
Bitcoin holding $6000 is now on the line. Rabaglia: "With the 2018 low of $5,800 being tested a number of times, our sights are set at that level for all further sell-offs."
The latest price of Bitcoin is $6,282 (-4,25%). Ethereum is down over 10%, with XRP and Bitcoin Cash losing close to 12% of their value.
Read more: Sudden drop in the market: $16 billion gone in a few hours, BTC down 4%