Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Crypto News: Bitcoin Plunges, Coinbase Suffers Outage

By Joe Tenebruso - Updated Jul 26, 2019 at 12:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's been a rough day for the bulls.

The crypto marketplace is like the Wild West of the financial world -- and it's been even wilder than normal over the past 24 hours.

Here's a recap of some notable events that took place over the past day.

Bitcoin pulls back sharply

Bitcoin's volatility is back. After surging more than 300% from its lows near $3,200 back in December, the world's most valuable cryptocurrency has seen its price sink by more than 20% from its recent highs near $13,800 in the past 24 hours.

Other cryptocurrencies -- including Litecoin, Ripple's XRP, Ethereum, and Bitcoin Cash -- are also down more than 15%. Overall, the total market capitalization of cryptocurrencies at large fell by roughly $75 billion over the past day. 

A downwardly sloping chart

Image source: Getty Images.

Some traders are chalking up Bitcoin's fall to a simple technical correction after being "overbought," alleging that traders are taking gains after the cryptocurrency's huge recent upward move.

Others say the vicious drop was amplified by excessive leverage in the marketplace. Some crypto exchanges offer margin services that allow traders to leverage their bets by as much as 100 times. "The presence of leverage exacerbates the moves in both directions and affects the speed dramatically," Genesis Global Trading CEO Michael Moro told CNBC.

One thing is for sure: Bitcoin's notorious volatility has returned. Where it takes the popular cryptocurrency's price next remains to be seen.

Coinbase suffers outage

Popular crypto exchange Coinbase experienced a service outage on Wednesday. This was likely another factor that contributed to price declines for Bitcoin and other cryptocurrencies, as exchange problems tend to reduce investor confidence and overall market sentiment.

Bitcoin's recent surge has brought many traders back into the marketplace. Exchanges such as Binance, Bitstamp, and Coinbase have experienced record-high trading in Bitcoin and other digital currencies in recent days. While this is profitable for the exchanges, it appears such activity may have placed a strain on Coinbase's systems. Coinbase's site was down "for a short period of time due to high volume," a company spokesperson told CNBC.

Coinbase wasn't the only trading service that experienced issues during the day. Popular trading app Robinhood was also rendered inaccessible for a brief period of time, according to Coindesk.

These trading platform outages highlight one of the many risks inherent in the crypto markets: You may not be able to access your investments when you want to. Traders should plan accordingly, and factor the possibility of additional exchange outages into their strategies.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.