Reasons Why the Crypto Market is Down Today
2024-12-12
Bittime - The cryptocurrency market experienced a major decline in the last 24 hours, with more than $590 million in liquidation positions recorded. This is not an uncommon occurrence, considering how volatile the crypto market is. But what caused this decline? The answer lies in the political tensions that occur in South Korea.
Political Tensions in South Korea
The political crisis that emerged after the President of South Korea, Yoon Suk-yeol, suddenly declared martial law caused major turmoil in the crypto market. Although the announcement was ultimately rescinded, the crypto market was affected quickly.
Many traders panicked and started withdrawing their funds from the market, triggering a significant drop in prices. This shows how sensitive the crypto market is to big news from around the world, even from countries as far away as South Korea.
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Flash Crash and its Impact
Term flash crash often heard in the crypto market, referring to a sharp price drop in a short period of time. This flash crash caused massive liquidations, wiping out billions of dollars in market value in a short period of time. After these declines, the market often experiences a gradual recovery, and this gives investors the opportunity to purchase assets at lower prices.
XRP Experiences a Drastic Drop
One of the most affected cryptocurrencies is XRP. After enjoying a price surge of more than 400% in a month, XRP prices fell sharply in the wake of tensions in South Korea. On the Upbit exchange, the price of XRP even fell by more than 50%.
This happened because many investors started taking profits after prices soared high. Within three days, more than $4 billion in profits from XRP had been disbursed, making it the highest level of profit-taking since 2021.
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Bitcoin and the Potential to Go to $100,000
Bitcoin is also not immune from the impact of this tension. After reaching nearly $100,000, Bitcoin's price fell to around $93,250. Many traders hope Bitcoin can break $100,000, but with large market fluctuations, Bitcoin price remains dependent on market sentiment. Despite increasing Bitcoin inflow to exchanges, there are no signs that large holders will sell soon.
Read also: How to Take Profit from Crypto Trading So You Don't Lose
Conclusion
The current crypto market decline was triggered by global political tensions, such as those occurring in South Korea. Flash crashes are part of the natural cycle of the crypto market, and although many panic, they can be an opportunity for investors looking to buy at lower prices. As an investor, it is important to remain calm and understand that the crypto market always moves in cycles that can bring new opportunities.
FAQ Penurunan Pass Crypto
What are the main causes of the current crypto market downturn?
Political tensions in South Korea, following the declaration of martial law by President Yoon Suk-yeol.
What's that flash crash in the crypto market?
Sharp price drops over a short period of time, often leading to massive liquidations and gradual recovery.
Why did the price of XRP fall drastically?
Because many investors cashed out profits after a price spike, triggered by tensions in South Korea.
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Reference
Hamid, Jai, The crypto bull run will not last as long as you think, accessed December 11, 2024.
Muchai, Florence, Why is the crypto market down today? Liquidations near $600M, and bulls take a rest, accessed December 11, 2024.
Author: MF
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