At around 2:15 UTC, bitcoin (BTC) began to tumble significantly as its value dropped below a previous area of support at around $18,474.
Spot volume across major exchanges also rose sharply as bitcoin’s 24-hour range fell to between $19,474 and $16,514 – its sharpest decline since the wider markets crash in March, according to CoinDesk 20 data. Today’s fall marks an over 12% drop over 24 hours.
Bitcoin was last seen trading up slightly at $17,040.
“I think this is a correction before we break $20,000,” said Ki Young Ju, CEO at analytics firm CryptoQuant. “Other long-term on-chain indicators like BTC and stablecoin reserve say the potential buying pressure still prevails so far.”
While the reason for the drop isn’t entirely clear, the sell-off move comes at a time when Coinbase’s CEO Brian Armstrong voiced his concerns on Wednesday night over the U.S. Treasury Department’s rumored plans to attempt to track owners of self-hosted cryptocurrency wallets.
It also came soon before an expected flood of bitcoin onto the market that had been frozen on the OKEx exchange due to an absent key holder. OKEx restarted withdrawals at 08:00 UTC, well after the main portion of Thursday’s drop.
The plunge liquidated $950 million worth of positions across major exchanges, as noted by derivatives data provider Bybt.
“The latest BTC price drop is the first of many tests for new money on whether they have the vision and stomach to truly invest in BTC and the future of digital finance, or if they’ll simply repeat 2018 and wash out of the market,” said Jehan Chu, co-founder and managing partner at Hong Kong-based blockchain investment and trading firm Kenetic.
Most other notable cryptocurrencies also fell, with Chainlink (LINK, +0.01%) and Cardano (ADA, +4.70%) suffering the worst drops across the board, losing 18.9% and 16.7%.
Updated (Nov. 26, 2020, 09:30 UTC) to include information regarding OKEx withdrawals.
Updated (15:12 UTC, Nov. 26 2020): Corrected headline and sentence that said the drop was the largest in 12 weeks. The 12% drop is the largest since March.