Major coins, including Bitcoin (CRYPTO: BTC), plunged on the day El Salvador announced it was adopting the apex cryptocurrency as legal tender with global cryptocurrency market capitalization falling 12.01% to $2.08 trillion.
What Happened: BTC traded 10.26% lower at $47,049.68 over 24 hours and was up 0.41% over a seven-day trailing period.
See Also: How To Buy Bitcoin (BTC)
Ethereum (CRYPTO: ETH) declined 11.42% to $3,454.47 over 24 hours. For the week, the second-largest coin by market cap was up 1.35%.
Shiba Inu-themed Dogecoin (CRYPTO: DOGE) was down 15.58% to $0.26 over 24 hours. The meme cryptocurrency fell 5.95% over the last seven days.
Solana (CRYPTO: SOL), which shot up 56.12% over the last seven days, traded 0.87% higher at $170.07 at press time. The cryptocurrency has racked up gains of 9,175.19% so far this year.
The top gainer on Tuesday was NEAR Protocol (CRYPTO: NEAR), up 44.47% at $8.68 over 24 hours. NEAR rose 63.45% for the week.
The decentralized application protocol’s token hit an all-time high of $9.36 on Tuesday. NEAR rose 61.9% and 64.88% against BTC and ETH respectively over 24 hours.
Other notable gainers over 24 hours included Quant (CRYPTO: QNT) and UNUS SED LEO (CRYPTO: LEO).
QNT shot up 6.15% to $345.36 while LEO rose 5.29% to $3.14 in the period.
Why It Matters: On Tuesday, El Salvador’s President Nayib Bukele said just before the apex coin’s adoption as legal tender, “In 3 minutes, we make history.”
The President later said the country was purchasing “the dip” as it added 150 BTC taking its kitty to 550 BTC or nearly $25.9 million.
It appears the discount is ending
Thanks for the dip @IMFNews. We saved a million in printed paper.
— Nayib Bukele (@nayibbukele) September 7, 2021
On the day BTC turned legal tender in El Salvador, it fell as much as 18.10% touching an intraday low of $43,285.21 from a 24-hour high of $52,853.76.
BTC’s crash on Tuesday happened in minutes amid an increase in trading volume. $3.22 billion worth of long positions were liquidated, which is an increase of 1,700% compared to the previous day.
While BTC broke the 0.618 Fibonacci level at $51,000 on Monday, this key level failed to act as support.
“It’s this volatility that has made many in El Salvador less than optimistic about the currency’s (BTC) adoption,” Hargreaves Lansdown, a financial services company based in the United Kingdom, said, as reported by CoinDesk.
“Making transactions in the currency when the future price is so uncertain is risky,” the firm said.
Kevin Kang, founding principal of crypto hedge fund BKCoin Capital said that the rise in prices of altcoins represents frothiness in the market. He said that Bitcoin Cash (CRYPTO: BCH), Litecoin (CRYPTO: LTC), and EOS (CRYPTO: EOS) “typically make their move towards the end of the cycle,” as per CoinDesk.