Bitcoin drops by $8,400, XRP crashes 29% in mysterious overnight flash crash

  • The top cryptocurrency lost $8,400 to trade at its lowest price in three weeks, with altcoins faring much worse – XRP went down close to 30%, while BCH and BSV saw even bigger drops.
  • The overnight crash is mysterious, but some analysts have attributed it to a rumor that the U.S Treasury was looking to charge several firms it believes laundered funds through crypto.

It has been a utopia in the cryptocurrency industry for the past three weeks, with most coins seeing a new record price every other day. However, in the early morning hours today, a mysterious flash crash has seen most coins register at least 15% price drops. Bitcoin lost $8,400 in a few hours, with XRP, Bitcoin Cash (BCH), Bitcoin SV (BSV), Dash and Ethereum Classic (ETC) faring much worse.

Bitcoin bleeds, liquidates $10 billion

The top cryptocurrency dropped from roughly $60,000 to just over $52,000 in under half an hour, around 3:00 UTC today. It has since bounced back slightly and is trading at $57,600 at press time. This is still a 7% overnight drop.

The reason for the drop is not yet clear. However, some analysts attribute it to a rumor that the U.S Treasury is about to crack down on cryptocurrency money laundering. According to unnamed sources, the Treasury will charge several financial institutions in the U.S that have connections to the illegal practice. CNF hasn’t been able to find any tangible evidence to support the claim at the time of press.

Jake Chervinsky, a leading digital assets lawyer, has cast doubt about the validity of the rumor. He took to Twitter to point out that Treasury doesn’t carry out enforcement measures in the U.S – this is the Justice Department’s role. In addition, such actions are always confidential and are unlikely to be leaked beforehand.

The crash comes just a day after turkey banned Bitcoin payments, leading some analysts to draw connections between the two. However, on the day following the ban, Bitcoin barely showed signs of any loss in momentum.

The price drop has led to the liquidation of $10 billion worth of cryptocurrency positions according to data from Bybt. The crypto derivatives data analytics platform shows that Bitcoin led with $5.1 billion in liquidations. Ethereum was second with $1.12 billion, XRP was at $462 million while BNB saw $308 million worth of liquidations.

According to Ryan Watkins, Messari’s lead researcher, this is the largest liquidation in crypto ever, by a long mile.

XRP, BCH and BSV lead altcoin meltdown

The altcoin sector wasn’t spared either, bleeding much harder than Bitcoin. XRP, which has had the biggest rallies of late, lost 29 percent in an hour to trade at $1.22. The cryptocurrency has since recovered slightly and is trading at $1.4 at press time. Despite the correction, XRP is still in the green in comparison to a month ago when it traded for $0.47.

Other altcoins didn’t fare any better. Ethereum, the biggest altcoin, lost close to $460 in the 15-minute price crash to trade at $2,011. It’s now ar $2,239. Bitcoin Cash, another coin that has blown up in the past week, is down 20 percent at press time. BCH had close to tripled in the past month to trade just shy of $1,200, up from $470 on March 25.

TRON is down 15 percent, EOS is down 19 percent, BSV lost 27 percent and Ethereum Classic is short 22 percent.

A few coins have defied the odds, one of which is NANO. The token is up a staggering 39 percent in the past 24 hours to trade at $12.78, up from $8.6. Its volume is also up by 230 percent, showing that traders have been piling in.

About Author

Steve has been a blockchain writer for four years, and a crypto enthusiast for even longer. He is most excited by the application of blockchain to solve the challenges facing developing nations.

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