I’m sure some of you already know these things but just wanted to make this post for those who don’t because this crash happened so suddenly without an immediately visible cause.
Evergrande announced its ‘indebtedness’ (their way of saying they’re defaulting) today (or ‘late last night’ for most of the US), and investors holding dead bonds can’t cover their collateral with that anymore so they needed to pull their crypto funds.
More FUD from India
The Thanksgiving dip happened after word spread that Indian gov’t was going to ban crypto trading. Today/yesterday, a similar but more specific rumor started circulating that their gov’t is going to ban non-custodial wallets and the use of any non-Indian exchanges, which probably prompted another sell-off there as well.
Too many long orders with a certain liquidation point gives whales (and exchanges) a ripe opportunity to collect easy liquidity and buy back in at a lower price later. Many birds killed with one stone here. I’ve seen many people call this blatant market manipulation…and that’s probably not an entirely wrong assumption…but I do think it’s important to keep the two FUD points above in mind as well. Market manipulation in this instance was probably not the end goal but simply the inevitable side effect of large investors in the Asian market trying to cover their own asses.
Other markets are stagnant or dropping
When other markets are down bad investors pull whatever they can out of crypto to prevent or mitigate losses elsewhere.
tl;dr it’s just a huge gathering of things occurring at once. Stay calm and buy more dip if you can, sit tight and hold what you’ve got if you can’t. Every get-rich story you’ve heard about crypto was really ‘I held for three to five years and was rewarded immensely for not panic selling’