The latest market crash has been a sight to behold after a majority of the cryptocurrencies slid in value. Bitcoin, the world’s largest cryptocurrency started the drop with altcoins such as Ethereum, XRP and Bitcoin Cash following it. However, one of the biggest losers was Chainlink (Link), as the cryptocurrency plummeted in the space of a few hours by more than 99 percent. The crash was wiping out both its market share and its market value.
Cryptocurrencies were not the only asset to be hit by this crunch as stocks such as the S&P 500 and the Nasdaq also witnessed pitiful falls. While a majority of the market thought the major assets would take a hit, Link became the surprise worst loser. The fall was so stupendous that it created new records in the bear department.
At the time of writing, Link was trading for $2.40 with a total market cap of $840.460 million. The 24-hour market volume was $819.855 million after an 18.53 percent fall in price over the previous day. The fall first started on March 11, after which it continued to crumble till it hit a low of $1.54 from $4.11. This crash was surprising because just a week ago, Link had it’s an all-time high of $5.
In the span of just a day, the cryptocurrency’s value had fallen by more than 55 percent. The LINK/USDT pairing dropped even further on Binance to trade at $0.0136. The major price hit also caused Link to drop from its position as the 11th largest cryptocurrency. Just a day ago, Link’s market cap was clocked to be over a billion dollars.
There have been no other falls in Link’s price as the price had stabilized after the first time around. The event was considered important because a 99 percent wipeout of an asset’s value usually annihilates it completely. Link’s fall on Binance was part of a record that showed several cryptocurrencies suffered on CZ’s platform. Towards the fag end of 2019, Bitcoin had fallen by more than $680 on Binance before recovering to the $7450 mark.
As the price of Bitcoin dropped, so did it open interests on Link/USDT contracts. These contracts had dropped by 57.8 percent while the price dropped by more than 99 percent. There was also the confusion where some people were able to put in Link buy orders for 5x below the market price. To this, CZ had responded:
“Just checked, the buy order was put in 2019-01-16, the first day the LINK/USDT pair was added. We didn’t have the price band restrictions back then. We don’t cancel user orders. In fact, this particular order was put in 8 seconds after the live trading on that pair. When we first list a new pair, the price band restrictions don’t work because there is no price in our system for that pair. The price band is only enabled after the price stabilizes.”
The Binance CEO also assured users that any arbitrage opportunity that had occurred from the Link buy order was eliminated. No other parts, including the Futures and Margin trading sectors, were affected. The Link liquidation was one of the examples of price crashes during the times of Coronavirus.
As the disease caused by the coronavirus continues to spread across the globe, it becomes necessary to stay calm and vigilant. Cryptocurrency prices, along with its other financial counterparts will only recover once people start trusting the systems completely.