Here are 4 potential causes.
A Korean exchange experienced a hack attack. Coinrail isn’t a very large exchange, but anytime word spreads of an exchange being hacked can spook the market.
The US government appears to be investigating some major exchanges for not taking enough steps to prevent the manipulation of cryptocurrency prices. Ironically, if manipulation has occurred, it would appear to be manipulation that has artificially lowered prices. But any talk of a more aggressive regulatory approach by a major government also can spook the market.
Bitcoin has been trading in a narrow range for weeks. Extended narrow trading ranges tend to end with a boom to the up or down side. It appears we went down this time.
This 4th one is unlikely, but whenever we see a sudden price drop, one wonders if the Mt. Gox trustee is selling off a large amount of Bitcoin. A few price dumps in the past appear to have been caused by the , but I haven’t heard anything to connect the trustee to today’s price drop.
Whenever markets move suddenly, we tend to look for a direct causal link, but in reality, it’s generally a mix of many factors. Whatever the cause(s) this kind of volatility is fairly common in crypto. Practice good risk management strategies and strap in - no one ever said the ride to the moon would be without bumps.
citation: quoa.com
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