Bitcoin drops around 15% in biggest single-day loss since 26 June

Posted: 11 July 2019 4:42 pm

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Bitcoin has taken a plunge, but still has a fair way to go before it's not broadly rising.

The markets have gone red over the last 24 hours and Bitcoin has posted its biggest single-day loss since it plunged from $14,000 on 26 June (depending on your timezone). The shift saw it drop over 14% in just a few hours, and in the last day it's gone from highs of about $13,200 to lows of around $11,550.

The good news and the bad news

The bad news is that Bitcoin is now trading down at under $12,000 when just hours ago people were deciding what colour Lamborghini they'd get. The good news is that Bitcoin hasn't yet invalidated its rule of stepping to higher lows. Until it's sub-$10,000, it's still quite clearly moving upwards.

So, did anything in particular cause this or is it just the market doing market things?

There are a few possible bits of news which could have spooked the herd.

One is that someone tried to mine an invalid Bitcoin block.

The appearance of bugs, theft or other misadventure is bad news, but this seems to be a bit of a non-event. As BitMEX noted, there was a mild price drop which corresponded with this event, but it is almost certainly unrelated.

Another incidental correlation is that Bitcoin was just a fraction of a percent shy of its highest market dominance since 2017 when the markets started to turn, and Bitcoin dominance slightly turned with it. It could be that there's some kind of invisible market force in action between Bitcoin and altcoins, but it still seems more likely to be a coincidence.

A more likely culprit may be that the Bitfinex-Tether case isn't finished yet. New filings from the New York attorney general's office have made the case that – to paraphrase – Bitfinex and Tether have been acting naughty. It's possible that people are trying to head to the door before anything happens.

That said, the Tether printing press is still going strong.

There have been two massive $100 million printing runs yesterday and the day before, now reflected in the Tether market cap (green line).

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Based on the energy of the recent Tether printing run, someone might expect a decent upwards bounce after the dust has settled on today's fall.

On the exchanges

But it's tough to discount the theories of price manipulation, especially given the deliberate-looking market dumping being carried out by at least one clown whale, in the form of underpriced Bitcoin sell orders.

Indeed, the last week has definitely been marked by whale action.

The table below shows hour-by-hour Bitcoin trading volumes on Kraken in yellow, Gemini in grey, Coinbase in pink and Bitfinex in green.

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Source: Bitcoinity

It doesn't include a lot of exchanges, such as Binance, but it's also a relatively clear (and pretty) way of contrasting the regular activity of Coinbase and Gemini with the much more abrupt whale moves of Kraken and Bitfinex. It's perhaps not coincidental that Kraken and Bitfinex are believed to be key ramps for Tether.

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Disclosure: The author holds BNB, BTC at the time of writing.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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