In the last 24 hours, the cryptography market has suffered a heavy sell-off as Bitcoin showed a 3% decline in price, leading the market to lose $ 10 billion.
Ethereum and EOS recorded the largest drop in the major cryptocurrencies to 9 percent, while Bitcoin Cash, Litecoin, Monero, Cardano and Dash showed a strong loss of 7 percent.
What Caused the Steep Decline?
On September 16, CCN reported that a portfolio containing $ 720 million in Bitcoin, which had been dormant for many years, began to transfer funds to Bitfinex.
A Reddit user with an online alias / Sick_Silk claimed that the portfolio is owned by a Silk Road figure, who was probably involved in the operation of the dark web market. The user said:
"It seems that the owner of a huge SilkRoad wallet has been actively investing funds for 3 days, dividing it into blocks of 100 subwallet coins.The original portfolio held 111,114.62 BTC / BCH , which is currently valued at ~ $ 844 million (without taking into account the other #Bitcoin forks) .The last movements on these subwallets are 4 years and 5 months (March 9, 2014). "
WizSec, an & rsquo; agency security company based in Japan who discovered the money launderer behind the stolen funds of the now-defunct cryptocurrency change. Gox, said that the portfolio is completely foreign to Silk Road, but rather to the mountain. Gox. The analysts of the agency explained that a whale investor who bought a huge batch of Bitcoins a few years ago started moving the funds.
It is possible that the sale of hundreds of millions of dollars in Bitcoin initiated by a whale investor has caused a domino effect on all major cryptocurrant trade, causing a substantial decline in the market.
Prior to September 18, major digital assets like Bitcoin and Ethereum showed stability in the low price range, showing signs of a short-term fund. Thus, it required a big sale and an unexpected event in the cryptocurrency currency market to trigger a decline in this scale.
Where is the market going Next?
Two days ago, Edward Morra, a respected technical analyst in the encrypted space, said it was not likely to fall below the $ 6,000 support level for Bitcoin.
"The market capitalization could close like a nice green hammer today at the weekly closing, the last 2 times we did – we left for a small rally for a couple of weeks I can not be very bearish here to be honest, "said Morra .
For a few weeks, the market has shown oversold conditions, which most likely led BTC to halt its fall to 3 percent. While other cryptocurrencies have declined in larger margins, BTC successfully avoided a fall below the support level of $ 6,000, remaining above $ 6,200.
Given the market trend throughout the month of September, it is likely that the temporary market decline will be recovered in the coming days, allowing the market to rebound to $ 200 billion.
The market has still avoided reaching its annual minimum of $ 186 billion, which is an optimistic result of the decline.
Close-up image of Shutterstock. TradingView Charts.
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