Massive bitcoin drop sent quotes down to the level of $6700

The cryptocurrency market recorded a decline of more than $25 billion in almost an hour, when on Sunday, June 10, a sharp bitcoin sale-off was recorded in the thin market. Last Friday's trading ended at $7625 for one digital coin, while the Asian session on Monday met the market at $6700. We can search for the reason of the decline in technical factors or explain the current decline due to near market factors, but it seems that the market has dropped for a simple reason: a drop in volume and demand.

Since last week, despite some market stability - when for a two weeks quotes were in a tight range, that is something unusual for crypto market, and amid optimistic short and medium-term outlook, bitcoin could not overcome the resistance at $7700. Many indicators, including MACD, moving averages and RSI, demonstrated an optimistic short-term trend, and in general markets lived positive expectations.

However, there is always one simple rule in the market - if the market can not grow, it will decline sooner or later. In the case of bitcoin, we mentioned one alarming detail: the daily trading volume of bitcoin made up only half of its volume in late April and early May 2018. Demand from investors has decreased significantly and this led to a minimum volume of trading.

Most traders and analysts explain the short-term price drop by hacking into the Coinrail exchange in South Korea, which led to a loss of $40 million. Coinrail is a small-scale cryptocurrency exchange in South Korea. The majority of traders use three crypto exchange Bithumb, UPbit and Korbit, because they are more reliable than small crypto-exchanges.

However, it is premature to claim that the break-in of Coinrail resulted in the price dropping by 10 percent per day, Coinrail accounts just for 5 percent of South Korea trading volumes. In general, this is less than 0.1 percent of the global volume of trade in crypto-currencies.

FortFS