Crypto Weekly Roundup: >$500 Billion CAD Eradicated From Market Cap. Umm…What Happened?

April 23, 2021

Welcome to this week’s crypto roundup, and hoo boy, we do have quite a lot to talk about don’t we? I think this meme best describes the absolute s**tstorm we have just been through this week.

As it turns out, apart from being better than Woody (don’t @ me), Buzz seems to have hit the nail right on its head.

NOTE: All values mentioned are in CAD unless otherwise mentioned.

Since April 17, the amount of FUDy news bombarding me on social media has been off the scale. Unfortunately, it has had an adverse effect on the price. Check this out:

The overall crypto market cap crashed by $600 billion before settling around $2.60T. So, how exactly did we end up losing more than half a trillion dollars? Let’s take a look.

NOTE: The charts below have been taken from Santiment, Glassnode, and BitInfoCharts.

FUD #1: The Hashrate Dilemma

Prior to the weekend, the Bitcoin hashrate peaked at 218 exahash per second (EH/s) and then crashed by 49%.

As per Chinese reporter Wu Blockchain:

“The hashrate of bitcoin mining pools plummeted in 24 hours. Antpool fell by 24.5%, Btc.com fell by 18.9%, Poolin fell by 33%, Binance pool fell by 20%.”

So, why did this happen?

Turns out that the Xinjiang territory in China, which is a Bitcoin mining hub, had gone through a massive power outage. Because of this, all the mining farms located here went offline which plunged the overall hashrate. More often than not, the price follows the hashrate, which is exactly what happened here. Throughout the weekend, the Bitcoin price dropped from $79,570 to $69,860, losing almost $10,000.

FUD #2: Futures Liquidated

Over the weekend, Glassnode reported a staggering $1,847,700,724 USD of longs being liquidated.

Turns out, the main catalyst of this liquidation event could have been a whale selling off nearly 9,000 BTC. Many are speculating that this is someone who had some inside info about the going ons in Xinjiang. Of course, this could have been a coincidence. However, the fact remains that this event wiped out all the massive leverage that had been in the Bitcoin derivatives markets.

Overall, 1 million trader accounts were liquidated, wherein $6.12 billion contracts were liquidated — $11.62 billion including alt-coin markets.

Ok, let’s put all these numbers into perspective.

On March 12, 2020, the Bitcoin price fell from $9,900 to $6,060, losing almost 40% in its overall valuation. However, the overall liquidation that happened that day is still dwarfed by the amount that occurred over this weekend. Despite this, the fact that BTC dropped by just a little over 20% is a testament to the premier cryptocurrency’s resiliency.

FUD #3: Biden Tax

The Biden presidency has proposed to double the capital gains tax rate for the wealthy to 39.6%. Coupled with an existing tax on investment income, the federal tax rates for investors could be as high as 43.4%. Following this news, the Dow fell by 1% or nearly 350 points, while Bitcoin dropped below $50,000 USD for the first time since March 2020.

How Bad Is The Sell-Off?

As per Santiment, the number of exchange inflows saw two significant spikes on April 19 and

April 21.

Usually an exchange inflow leads to a sell-off and a drop in overall valuation, which is exactly what happened. In fact, according to Wu Blockchain 20,370 bitcoins were transferred to the exchanges on April 23. Wu noted:

“Combined with the price trend of the day, these bitcoins are likely to be used to sell in the market. The number of net inflows from such exchanges is second only to last year’s 312 period.”

According to Santiment, the number of addresses holding 1,000–100,000 bitcoins have been steadily declining throughout the week.

What’s Going To Happen Now?

As things stand, it looks very likely that the crypto market will drop some more. However, cryptocurrencies right now are a lot more resilient than they have ever been. This could be a proper test to see if the market has what it takes to stand up to the pressure before bouncing up to new highs.

Empower And Earn

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Your friend will have to:

• Use your unique invite link
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• Fund their account
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You can refer as many friends as you can by April 30. You will be rewarded with a $60 referral bonus when your referred friend funds their account.