Why cryptocurrency market collapsed again?

On February 24, the Bitcoin price plunged from $4,190 to $3,714 within minutes by 11.3 percent against the U.S. dollar. While many traders were not taken aback by the sudden drop in the price of the dominant cryptocurrency, some were surprised by the magnitude of it in a short time frame.

Last week, prior to the fall in the price of Bitcoin and the $11 billion wipeout in the crypto market, CME revealed that it saw a record high daily volume of BTC futures contracts. On February 19, CME cleared 18,000 BTC contracts, up nearly two-fold from its previous record high at just over 10,000.

Speaking to CCN, Olszewicz stated that the sudden spike in the daily volume of BTC contracts on CME could have triggered the build-up of sell pressure on the asset, leading BTC to record a large downside movement. Every two-month BTC futures contracts on CME have demonstrated a decline in the price of BTC since the launch of the CME BTC futures market.

In consideration of the trend of the BTC futures market since early 2018, the analyst said that it could have fueled the retracement of the asset, adding “I think that had a big impact personally.” Although some believe that the impact of CME on the price of BTC is limited because the contracts on CME are cash-settled, it remains as the biggest BTC futures market.

In the last 24 hours, leading crypto assets in the likes of Bitcoin, Ethereum, Ripple, EOS, Litecoin, and Bitcoin Cash recorded losses in the range of 10 to 20 percent, with EOS recording an 18 percent loss. Bitcoin has slightly recovered by around 1 percent since its steep drop below the $3,800 mark. In the near-term, several analysts expect the market to demonstrate stability in the current range.

Bitcoin Price Plunges 11%: Factors Behind Sunday’s Big Crypto Market Dump, CCN, Feb 25