Key Takeaways
- Digital assets nosedive, but later jump back as investors buy a 30% dip
- Bitcoin now hovers around $40,000, up 3% on Thursday
Cryptos Swing in Chaos
A bearish market, by definition, is a market who has declined 20% from a previous high. By this standardized definition, Bitcoin and other cryptocurrencies went in and out of a bear market in less than a day.
Wild and chaotic trading in the cryptocurrency market defined Wednesday’s session as investors sought safety amid fear and uncertainty but later decided to dive back into the risky assets. A stream of bad news narrated the first half of the trading session on Wednesday. Bitcoin, Ether, Dogecoin and other cryptos were knocked off by the news that Chinese regulators have banned financial institutions from accepting cryptocurrency or dealing in any way with cryptocurrency products or services.
The announcement propagated around crypto circles relatively fast and soon after, bitcoin slipped to levels around $30,000, trading at a three-month low. Bitcoin experienced a 30% drop in just a few hours before market participants jumped at the chance to buy the dip and push the digital coin higher by 28% from the session low to levels around $38,000. Bitcoin closed the trading day around $38,300, still down 11% on the day.
Digital Assets Nosedive and Jump Back
Ether, the second largest coin, dropped even more. A decline of 45% rocked the Ethereum token as the price reached an intraday low of $1,890. The coin was lifted near the closing hours of Wednesday’s trading and Ether managed to end the session at $2,500 per coin, or 26% lower on the day after a 36% climb from the bottom.
On Thursday, the cryptocurrency market continued to the upside. Bitcoin, Ether and other digital assets are mostly higher as market participants are struggling to break the downside pressure. Bitcoin is now hovering below the $40,000 milestone, higher by about 3% today. Ether is pushing toward $2,700, up over 4% so far in the session.
Elon Musk, whose Tweets are largely considered as market-moving, did not sit out during yesterday’s trading madness. The Tesla and SpaceX CEO tweeted in the peak of the crypto-wide sell-off. Through a combination of text and emojis, Elon Musk said Tesla had “diamond hands”, implying that the EV maker is still holding on to its Bitcoin stack worth over $1.7bn.
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