After yesterday’s news of Vitalik dumping all his dog tokens, we woke up on a different kind of bad news. The whole cryptocurrency market was down by more than 10% in the past 24 hours. Most cryptos were seen red by multiple digits, while very few were seen rising. What caused this crypto crash? Here are 3 reasons that explain this crashing market.
3- Vitalik dumped Dog Tokens
In a previous article, we went into detail explaining what happened with the dog token dump. This action caused chaos and confusion in the meme crypto sphere, and many investors lost a significant amount of money due to price depreciation. This all happened within a few hours. People who were really affected sold all their meme tokens and bought more solid cryptos like Bitcoin, Ether, or other Altcoins. This should’ve been good news, but reason number 2 blew everything off.
2- Tesla Disowns Bitcoin
The cryptocurrency market was ecstatic when Tesla announced that they decided to hold some Bitcoins. This news lifted the entire market. Elon Musk announced soon after that Tesla would start accepting Bitcoins as payments for their cars. The market went even higher. Elon shifted his attention to Dogecoin though and started tweeting left and right. This caused a strong pump in Dogecoin’s price.
The recent SNL event wasn’t a success for Dogecoin, as most traders who made their profits liquidated their positions, leaving people who bought in late in a huge red mess. Elon was clearly seen as a bad person for causing such drama that some people create a crypto called “FuckElon” to let off their steam.
Well, coincidentally today, Elon tweets that Tesla will stop accepting Bitcoins as a way of payment, and even disowned the cryptocurrency because they claimed it wasn’t eco-friendly due to high gas fees. See the link? People bashing Elon, Elon disowns Bitcoin…This is not justifiable at all from Tesla company, as nothing changed with Bitcoin’s fundamentals since they first bought USD 1.5 Billion worth of Bitcoins. Why the sudden change in stance now? Maybe they made their profits and liquidated? Well, the company stated they won’t liquidate ALL their holdings, and await better alternatives. Altcoin season, beware.
1- The Snowball Effect – PANIC leads to Crypto Crash
So let’s recap: Vitalik sells, Elon spits bad news, people start selling, leading to lower prices, thus causing more panic…This is how the snowball effect happens. Many events that are not related happen, causing people to get into a FUD zone. If we take a closer look at Google trends below, we can clearly see how people panicked and start googling what to do. This happened EXACTLY when Elon made his tweet, at 1:06 am (both the Tweet and Trend time).
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