Bitcoin rebounded on May 20, clawing back to just over $40,000 following a brutal selloff earlier in the week. The day before, the price of the world’s largest digital currency appeared to be in freefall, plunging $10,000 in less than an hour.
The carnage started after crypto exchanges saw a massive influx of bitcoin in what was dubbed the second biggest inflow since Black Thursday in 2020. This naturally led to another bitcoin crash, causing even more panic selling. A total of 30,749.89 BTC was sold to exchanges in a single day, which is 10,000 shy of last year’s huge bitcoin crash, but still a significant amount to destabilize the market.
The majority of these coins (26,000) were sold to the Binance crypto exchange. This is more than 80% of the whole influx. Other exchanges also reported a huge influx of coins, with a drastic slowdown in outgoing transactions. At the time of the crash, bitcoin was sitting at $42,102 before plummeting to $35,000 on May 19.
Recent days have brought back memories of March 12, 2020, when more than 40,000 bitcoins were sold, causing its price to fall by 40%. At the time, the culprit was the global economic slowdown caused by the coronavirus pandemic, which prompted many people to liquidate their crypto assets. Since then, bitcoin hit a record high of $63,000 in early April of this year.
The latest crash is being attributed to a combination of reasons, starting with a decision by the Chinese government to ban the use of cryptocurrencies in its financial institutions. The electric car manufacturer Tesla, previously one of the biggest companies accepting crypto payments, ceased accepting bitcoin as a valid payment method. Meanwhile, the company’s owner, Elon Musk, fanned wild crypto trading with his tweets.
