Like a hiker who lost her footing on a treacherous path, Bitcoin tumbled down the mountain on Saturday morning, falling to as low as $30,194, according to metrics site CoinGecko. Bitcoin’s current price is $30,884, marking an 8.8% drop in the past 24 hours.
Ethereum, the second-largest cryptocurrency, also had a calamitous start to the weekend. It fell by 8% to lows of $1,718 before zipping back up to its current price, $1,772. Overall, this marks a 7.9% drop in the past 24 hours and a collapse of 21% in the past week.
Others followed in the wake of the top two coins, which make up the lion’s share of the market. Binance Coin fell by 6.8%, Cardano by 7.5%, Dogecoin by 7.8% and Polkadot by 8.7%.
This resulted in a 10% drop in the global market capitalization of all cryptocurrencies, which now rests crestfallen at $1.29 trillion.
Why did the crypto market crash?
Weekends tend to be more volatile since the institutional investors who save the market from collapse and temper it against outrageous breakouts are away from their desks.
Some analysts think that the upset could stem from one of the largest expiries of Bitcoin and Ethereum options contracts. The $3.8 billion in options contracts, signed many moons ago, grant buyers the choice to redeem all of that crypto, which they can dump on the market should they so wish.
“I think it’s plausible [it is causing volatility] since it’s the largest ever options expiry [for Ethereum],” Ki Young Ju, CEO of CryptoQuant, which provides data for investors, told Decrypt yesterday.
So, where to next? Singaporean crypto investment firm QCP Capital predicted today that Bitcoin would soon reverse to $39,400, and that ETH would return to highs of $2,550. Deribit’s Bitcoin futures market is less optimistic, and traders there concur that Bitcoin should return to just $33,220 by this time next year.