Yerevan (CoinChapter.com) – Bitcoin (BTC) exchange platforms like Binance and Coinbase experienced disruptions and delays as the price of the flagship cryptocurrency kept plummeting.
What’s behind the Bitcoin crash?
Bitcoin price initially dived on May 13, after Elon Musk’s controversial decision to cease accepting coin payments for Tesla’s electric vehicles. The U-turn he made was allegedly based on ecological concerns.
The cryptocurrency market got another crucial blow on May 19, when the People’s Bank of China ordered financial companies to “stop engaging with Bitcoin and similar digital assets.” That meant a complete ban on using cryptocurrencies as payment tokens and offering services that concern them.
BTC traded at 37,975 against the USD in the New York session Wednesday, registering an overall 28 percent decline in a week. The token briefly hit rock bottom at $30,000, the starting value of 2021, and a year-low for Bitcoin. It broke all the support lines, including the 200-day Moving Average (MA-200, the light blue wave on the chart).
As Bitcoin correlates with smaller coins on the market, the swing in BTC price affected all the others. Ethereum(ETH), the second-largest coin by both market cap, and price lost 27 percent since May 13. Litecoin (LTC) went down 30 percent in the same period.
The exchanges snapped
All of the mayhem on the crypto market provoked panic sales, which typically drive the price even lower. Other traders, however, saw an opportunity and decided to ‘buy the dip,’ foreseeing big profits ahead—the unusual activity led to increased pressure on exchange platforms and subsequent complications in transactions.
Binance, the world’s leading cryptocurrency exchange, was forced to disable Ethereum withdrawals because of network congestions temporarily. Coinbase, another prime exchange platform, called an ‘intermittent downtime‘ while it attempted to identify and repair the problem.
Many traders and investors experienced complications while attempting to buy Bitcoin and other tokens. One of them was the Pomp himself, Anthony Pompliano, an entrepreneur and a Bitcoin supporter. He took on Twitter to express his aggravation, which many other traders shared.
In addition, the entrepreneur expressed his appreciation for the support teams behind the exchanges that try to keep the system running.
Pomp’s tweet also meant that he still thinks the crypto market will bounce back, and many other experts agree. Another crypto bull and investor Mike Novogratz jokingly tweeted that the market will recover from all the frantic selling soon.
Bitcoin briefly dropped to the year-low of $30,000, registering an overall 28 percent crash since May 12.
The panic selling on one side, and the frantic rush to buy the dip on the other, took their toll as the exchanges collapsed under pressure. Bitcoin exchanges have malfunctioned before in times of sharp surges or drops. The recent glitches were repaired rather quickly. However, the inability to exchange their tokens freely left many traders in distress and possibly caused more panic. The upcoming sessions will show how it affected the market overall.