Sudden crypto drop sends bitcoin to three-week low

Representations of cryptocurrencies can be seen in this illustration, Aug 10, 2022. REUTERS/Dado Ruvic/Illustration

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SINGAPORE, Aug. 19 (Reuters) – Cryptocurrencies fell sharply on Friday, with sudden sales dragging bitcoin to a three-week low.

Bitcoin dropped a whopping 7.7% to $21,404, around 0640 GMT, in a matter of minutes during the European morning. It recovered slightly and then continued its downward trajectory to trade around USD 21,400 at 1138 GMT, down 8.2% on the day.

Ether also fell around the same time, most recently falling 8.8% at $1,685.

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The reason for the decline was not clear.

“It doesn’t show the pattern of a flash crash as assets didn’t recover strongly immediately, but fell even lower in the hours that followed,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown.

“It seems likely that this was the result of a large sale transaction.”

Streeter said it looked like the cryptocurrency cardano was the first to move, followed by bitcoin and ether, and then others, such as the altcoin dogecoin.

Cryptocurrencies have fallen dramatically so far this year as the Federal Reserve’s rate hikes and ultra-high inflation push investors to dump riskier assets.

Craig Erlam, senior market analyst at Oanda, said bitcoin’s failure to recover its losses “suggests there is substance to the move”.

Such sharp moves are common in the highly volatile cryptocurrency market. On June 15, bitcoin plunged more than 15% as investors were shocked by the collapse of a so-called stablecoin, TerraUSD, and a major cryptocurrency lender that is freezing customer withdrawals. read more

Friday’s move put bitcoin on track for the worst day since the June meltdown.

“Speculating in cryptocurrencies is extremely high risk and is not appropriate for the vast majority of people,” Hargreaves Lansdown’s Streeter said.

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Reporting by Tom Westbrook; Editing by Toby Chopra, Kirsten Donovan

Our Standards: The Thomson Reuters Trust Principles.

Elizabeth Howcroft

Thomson Reuters

Reports on the intersection of finance and technology, including cryptocurrencies, NFTs, virtual worlds and the money that powers “Web3”.

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