Bitcoin's price fell more than $800 in under five minutes on Tuesday, pushing the broader cryptocurrency market into the red.
The sell-off began at 14:45 UTC (10:45 a.m. ET) when the cryptocurrency was trading at highs above $10,137 and by 14:49 UTC, the price fell to $9,298. At press time, bitcoin is changing hands near $9,500, representing a 6.5% drop on the day, according to CoinDesk's Bitcoin Price Index. On BitMEX, prices were as low as $8,600.
The sudden price drop may have trapped many traders on the wrong side of the market. Moreover, the market was looking strong following Monday's convincing move above $10,000, and a few analysts were expecting bitcoin to continue rising toward $11,000.
However, buyers once again failed to keep prices above the $10,000 mark. The cryptocurrency has struggled multiple times over the past 12 months or so to establish a strong base above $10,000. The retreat, however, is unlikely to deter investors, who believe in bitcoin's long-term value as a safe haven asset and a hedge against inflation.
Moreover, "HODLing" sentiment has remained strong despite the unprecedented price volatility seen in the past five months. Nearly 60% of bitcoin’s supply hasn’t changed hands in over a year, a likely sign investors are holding in expectation of gains, according to Glassnode.
Meanwhile, traditional markets are seeing mixed action. While the Dow Jones Industrial Average is up 0.4%, the tech-heavy Nasdaq index is losing 0.5% of its value. Major European equity indices like Germany's DAX and U.K. FTSE are up 3% and 1%, respectively.
European shares seem to have picked up a strong bid in response to reports that Germany could launch a fresh stimulus package worth 100 billion euros ($112 billion) to defend against the coronavirus. The European Union has already proposed a plan-European stimulus plan of 750 billion euros.
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