Bitcoin Flash Crash to $8,500 Takes Crypto Community by Surprise

Whether the launch of Bakkt will have any positive influence in the long-term is yet to be seen. However, the lack of institutional money has resulted in bearish market sentiment, that might be cause of the sudden Bitcoin flash crash to $8,500. Will the Bitcoin price continue to fall or are market support levels enough to prevent it?

Bitcoin flash crash

Only a day after the most anticipated event in the cryptocurrency sector, the launch of Bakkt, the price of the largest cryptocurrency by market cap suddenly fell by $1,500 in a sudden Bitcoin flash crash. As many expected that the Bakkt exchange, a Bitcoin futures contracts trading platform, would act as a gateway towards institutional money, the market had a glimpse of what the real situation is: the interest in cryptocurrencies is not that great at the moment.

Many regard the Bakkt launch as a huge letdown

At the day of its launch, Bakkt only had a trading volume of 66 Bitcoins. A day later on Tuesday, Bakkt’s volume reached 165 Bitcoins, despite having a trading volume for a meager of 3 BTC for most of the day.

While famous crypto supporters such as Fundstrat analyst Tom Lee stated that the positive impact of Bakkt will only be seen in the long run, it seems that the platform’s launch represented a real wakeup call to the community. With no sight of real institutional money, it is now faced with the question whether there will still be a bull run this year. The resulting insecurity might be the cause of the sudden Bitcoin flash crash.

The Bitcoin flash crash reflects the current sentiment

In a rapid Bitcoin flash crash that boggled the mind of the crypto community, the BTC price dropped by $1,500, with the short-term price movement of the sector’s most significant asset still being uncertain.

Trading around $10,000 for several weeks, Bitcoin had reached its lowest volatility rate since May 2019. However, the market put a sudden stop to that when the asset’s price unexpectedly diminished.

At the time of writing, the Bitcoin price has stabilized at around $8,600. However, several market analysts suspect that we may experience a further drop in price, with Bitcoin reaching a strong historical support level of $7,500.

Due to the Bitcoin flash crash during which BTC has lost a significant portion of its value, the total market capitalization of all cryptocurrencies dropped by $20 billion as well.

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