Bitcoin Price Drops to $7,300 as Cryptocurrency Market Correction Continues
May 25, 2018 10:22 am,
Within the past three days, within merely 72 hours, the valuation of the cryptocurrency market sharply dropped from $390 to $333 billion, losing more than $57 billion. The bitcoin price has dropped below the $7,300 mark as the valuation of the cryptocurrency market declined by more than $25 billion. At its previously weekly low, the valuation of the cryptocurrency market dipped to $327 billion. Today, on May 24, the cryptocurrency market fell to a new monthly low.
As always, a wide range of factors have contributed to the recent market correction and it is difficult to pinpoint several events as the definitive factors behind the fall of the market. Rather, it as an amalgamation of many events that have occurred throughout the year, which include:
- Mt. Gox sell-off
- Possible manipulation by large-scale traders in the futures market
- Bitfinex taxation policy
- Bithumb and UPbit scandal in South Korea
- Failure of institutional investors to meet the anticipation of the community
- Regulatory uncertainty in several regions
But, it is most likely that the launch of the bitcoin futures market in late 2017 and the manipulation of the cryptocurrency market eventually led the market to become extremely volatile and experience large corrections on a regular basis.
The massive sell-off of bitcoin by the Mt. Gox trustee and a series of negative events from South Korea and the US-led investors to lose confidence in the cryptocurrency market in the short-term.
Earlier today, Bloomberg also reported that the US government and the Justice Department launched an investigation into illicit trading and bitcoin price manipulation.
“The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter,” Matt Robinson from Bloomberg reported.
Due to the abnormal volatility in the cryptocurrency market, it is likely that the US government suspects whales and large-scale investors of manipulating the market to drive larger movements on both the upside and downside.