Sudden crypto drop sends bitcoin to three-week low

Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration

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SINGAPORE, Aug 19 (Reuters) – Cryptocurrencies fell sharply on Friday, with a sudden selloff dragging bitcoin to its lowest level in three weeks.

Bitcoin fell 7.7% to $21,404 within minutes during the European morning, around 06:40 GMT. It rallied slightly and then continued its bearish trajectory to trade around $21,400 at 11:38 GMT, down 8.2% on the day.

Ether also fell around the same time and was last down 8.8% to $1,685.

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The reason for the fall was unclear.

“This does not show the pattern of a flash crash, as assets did not immediately rebound sharply 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 cardano cryptocurrency was the first to move, followed by bitcoin and ether, then others like the altcoin dogecoin.

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

Craig Erlam, senior market analyst at Oanda, said Bitcoin’s inability to recoup its losses “suggests there is substance to this decision.”

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

Friday’s decision put bitcoin on course for its worst day since the June crash.

“Speculating in cryptocurrencies is extremely risky and not suitable for the vast majority of people,” said Streeter of Hargreaves Lansdown.

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

Our standards: The Thomson Reuters Trust Principles.

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