Coin Market 5.19

May 19, 2021 became another day for crypto asset market players to wail after last year’s “3-12” black swan.

May 19, 2021 became another day for crypto asset market players to wail after last year’s “March 12” Black Swan.

After 10 consecutive days of downward movement, Bitcoin (BTC) took a big dive on the evening of May 19, diving all the way down to $29,000, down 32.5% from the opening price of $43,000 that day.

You know, last month on the 14th, BTC just ushered in an all-time high of $64,800, more than a month’s time price cut, the debate about the bull-bear divide is once again very much in the air.

Bitcoin’s plunge triggered many market chain reactions, with the crypto asset market as a whole sinking, futures bursting, and the liquidation of the on-chain mortgage lending class DeFi …… all kinds of bad news came one after another.

Unlike the “3-12” crash, this one swept through new investors in the current bull market, especially newcomers who heard about the dogcoin rally a month or two ago, and their wallets were deeply hurt by the high volatility of the market that cut their wallets in half a month. One new investor calculated that he had lost 70% of his crypto assets in less than a month and lamented in panic that “the cryptocurrency world is really scary”.

The day before the big dive in the cryptocurrency market, three major associations of China’s related financial industry jointly issued a statement to “prevent the risk of speculation in virtual currency trading”, and the feedback from the market was timely to educate the “consumers” who bought the risk once again.

As for how the market will look, how will the bulls and bears fare? The analysts will have to leave the answer to time this time too.

Blowout! Liquidation!

Starting around 8:30 p.m. on May 19, Yu Miao’s (pseudonym) cell phone’s quotation software would broadcast price changes from crypto assets almost every five minutes, “either the real-time quotes of bitcoin and ethereum, or how many millions of dollars have been burst on which platform.

$38,000, $36,000, $34,000 …… Yu Miao almost didn’t care to eat dinner again, every time he looked at the quotes, the price of BTC was a little lower than the last time. 9:10 pm, a thin needle went down and BTC fell below $30,000, probing to $29,000. He took a look at the amount in his account, “profits have been retracted by nearly half, and various assets have almost all been cut back from the highest point.

BTC, the top market capitalization, had a maximum drop of 32.5% from its opening price that day, while ETH had a maximum drop of 49% from its high that day. When BTC fell to $29,000, the top 20 crypto assets by market cap were almost all down around 20%. The total market cap of crypto assets fell from $2.1 trillion to $1.6 trillion, evaporating $452.6 billion in just one day, which is almost equivalent to the total market cap of US-listed Tesla ($536.6 billion).

Coin Market 5.19

BTC sinks to $29,000

Tesla has invested $1.5 billion in BTC this year, and its founder Elon Musk suddenly ‘changed his face’ from a bitcoin bullishness a week ago and started accusing bitcoin of being ‘not environmentally friendly to mine’ and ‘not decentralized enough’, his comments were seen as the trigger for bitcoin’s plunge, and DOGE, the dog coin he has been continuously singing about, was not spared in this plunge, dropping more than 25% intra-day, with the market cap in circulation It fell to seventh place from a not-so-distant best of fourth place.

In March this year, after Musk sang the praises of dogcoin, a group of meme (terrier culture) tokens jumped into the public’s view and staged a hundredfold or even thousandfold increase, attracting some users who had never been exposed to crypto assets to enter the market. In the current round of crash, they have become one of the most “injured” investment groups.

This wave of users who followed the trend into the market said that he switched to some mainstream assets after chasing high losses in DOGE and SHIB, but he didn’t expect to encounter the market plunge on May 19 immediately afterwards, and “the loss was further expanded, and he had lost 70% of his principal.

Yu Miao doesn’t think Musk can influence the market. He has been investing in crypto assets for 3 years and was a “hedged household” in the last round of bull market, but the main hoard of BTC and ETH finally took him over this year. He wanted to sell several times, but every time he remembered the rally bull market after September 2017, insisted that this time is the normal adjustment under the big cycle, “after all, it has gone up too much, need a pullback, Musk is more like a trigger.

Yu Miao, who only holds spot and does not play futures, believes that he is not “sore” compared to his friend, who lost more than 500,000 yuan after opening more in the early hours of the day. And according to AlCoin data, as of 24:00 on the 19th, the 24-hour burst of positions across the network was $6.79 billion, with Bitcoin futures alone bursting more than $3 billion.

The chain reaction from the crash did not only happen in the futures market, but the DeFi market, the hottest track this year, was equally disastrous. As a variety of collateralized lending type DApps were born on blockchain networks like Ether, the plunge, especially the ETH plunge triggered liquidation one after another.

At 21:30 on the evening of the 19th, according to DeBank data, the market caused a 24-hour liquidation of $265 million in mainstream DeFi protocols, except for Venus, a lending platform that had an attack on that day, which was not counted as inside or outside. The total lockup value of the DeFi market was $112.5 billion, down to $87 billion.

The dramatic volatility of the market on May 19 has undoubtedly cast a gloom on the current round of crypto asset bull market.

Bulls and bears are hard to distinguish

The day before the market’s great waterfall, a blogger of crypto asset analysis videos on TikToks had just finished analyzing the market’s bull-bear divide in comparison to the 2017 market patterns. on the afternoon of May 19, he urgently updated a video to remind his followers that “the next few days are crucial. At the time, BTC’s price had just fallen below $40,000, traveling to $39,662.15. “I still don’t think the bull market is over, but it’s very close.

The daily BTC line he was pointing to had crossed over with the 200-day exponential moving average (EMA200), an indicator often used by crypto asset market analysts and often seen as a bull-bear divide. Apparently, the subsequent bitcoin move has fallen completely below the EMA200, with BTC rallying to near $38,000 as of 3 a.m. on the 20th, still not far from the EMA200 as an indicator.

Data analytics platform Glassnode mentioned in its May 17 weekly report that Musk’s tweets about Bitcoin concerns caused confusion in the market, but the on-chain data showed a clear discrepancy – new market entrants panicked and sold BTC suffering losses, while long-term holders did not seem to be affected.

Coin Market 5.19

BTC non-zero addresses retreat 2.8% from highs

Glassnode provides recent changes in BTC on-chain addresses, with the total number of non-zero BTC addresses retreating 2.8% from the recent all-time high of 3,870 addresses, with a total of 1.1 million addresses selling all their crypto holdings in the correction, with stronger selling indicators from short-term holders and a panic sell-off underway. And with the panic, the total inflow of exchange BTC reached a significant high, with a net inflow of 27.5k BTC right from the start of this correction phase, second in size only to that sell-off in March 2020 and the PlusToken case in 2019.

The number of addresses in accumulation status increased by 1.1% compared to short-term holders, with accumulation addresses being defined as those with at least 2 buys, but never sold. In addition, addresses held by long-term holders returned to a growth pattern, with 2.4 million more BTC in supply than at the peak in 2017.

The crypto asset market is in a correction period where bulls and bears are uncertain for now, and there is no shortage of loyalists. As the market plunged, MicroStrategy CEO Michael Seiler tweeted that they had acquired 111,000 BTC and had not sold 1 satoshi (a satoshi is the smallest unit of count for Bitcoin) to date.

Parr, a former Goldman Sachs risk-averse fund manager and CEO of Global Macro Investor, kept his bullish price target for crypto unchanged during the selloff, “I think Bitcoin will be well above $250,000 in the next 12 months and Ether will be well above $20,000.

While Wall Street’s crypto asset giants remain confident in bitcoin, in China, risk prevention for the virtual currency has still not been relaxed at the regulatory level.

On May 18, the China Internet Finance Association, China Banking Association and China Payment Clearing Association jointly issued the “Announcement on Preventing the Risk of Speculation in Virtual Currency Transactions” (hereinafter referred to as the “Announcement”), which emphasized that financial institutions, payment institutions and other members are not allowed to conduct business related to virtual currencies, while requiring them to strengthen monitoring of virtual currency transaction funds. The Notice also reminds consumers to raise their awareness of risk prevention, beware of loss of property and rights, and cherish their bank accounts.

Industry insiders interpreted that the regulatory level may focus on the entry and exit of fiat currency to crypto assets to prevent the risk of speculation, and still to control the use of crypto assets for money laundering, fraud, pyramid schemes and other illegal and criminal activities.

The day after the release of the Announcement, the crypto asset market coincidentally experienced the biggest drop since 2021, with the risk from high volatility slamming into market participants in its most direct face.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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