The crypto market has been thriving over recent weeks. Ethereum and bitcoin set new records in terms of market capitalization every week. However, spikes in popular cryptocurrencies are followed by steep downward retracements. This is what happened in the early morning on February 15 when traders around the world lost almost $2 billion amid a steep fall in digital assets.
Over 300,000 traders in various crypto exchanges saw their stop loss orders triggered to avoid massive losses. The least lucky speculator who wanted to gain on bitcoin's rally lost nearly $21 million over the weekend. Such a sharp drop happened following a new historic high of the most popular cryptocurrency. On Friday, bitcoin briefly touched $49,700 per token. Unfortunately, it sank to the level of $45,500, having shed 3%.
A slump in bitcoin's value dragged down the whole crypto market. Over 90% of closed positions were long trades. It means that traders were betting on a further bullish run of cryptocurrencies. However, in light of a deep correction, crypto exchanges had to close long positions to prevent more losses.
Bitcoin is to blame for a crash of all popular cryptocurrencies. Ripple decreased to $0.53 per token. Litecoin plummeted to $197. The second traded cryptocurrency, Ethereum, nosedived to $1,716. Meanwhile, all digital currencies are regaining footing in confidence. A sharp downturn in the crypto market exposed big problems such as extreme volatility of digital currencies and growing dependence of the market on bitcoin. To be honest, a fall in the price of the number one cryptocurrency did not come as a bombshell. Experts warned that such a steep fall would be imminent once bitcoin has conquered lately the all-time peak. This particular case reveals that bitcoin's drop of no less than 5% made a serious impact on the whole crypto market, thus bringing investors huge losses.
Crypto fans may argue that the market is just facing a downward retracement of the most popular cryptocurrency and this will hardly dampen the overall market sentiment. The problem is that the new historic record and the following slump of 3% took place like a flash. Such developments again bring up the question about extreme volatility of digital assets.