05.03.202116:38 Forex Analysis & Reviews: Polkadot collapsed by 99% in a minute: the consequences

The cryptocurrency market has been experiencing serious and sharp price surges in recent days. According to the established tradition, bitcoin gets more than others. As a result, many companies have turned their attention to other digital assets. The Dubai Investment Fund has launched a massive multi-altcoin funding campaign. However, over the past day, an extremely unpleasant event took place associated with one of the favorites of the Dubai D7 - Polkadot.

On one of the cryptocurrency exchanges, the price of Polkadot futures dropped by 99%, from $33 to $0.2. The most alarming thing in this situation is that the price of the coin collapsed in one minute, after which it recovered to its usual quotes. At the fateful moment of the fall in the price of Polkadot, the trading volume on the Binance Futures crypto exchange was $18 million. Due to the critical drop in altcoin quotes, a retail trader lost $36 million, and the total losses of traders over the past day amounted to almost $49 million.

Exchange Rates 05.03.2021 analysis

Such failures occur in the cryptocurrency market, however, in a specific situation, the fall turned out to be too strong and happened at the wrong moment. It's just about the bets that the Dubai-based company FD7 Ventures made on Polkadot. In addition to launching a special investment fund, D7 has begun to actively promote altcoin in India as a promising alternative to bitcoin and a future medium of consumer transactions. The failure that has occurred can have a very negative impact on attitudes towards Polkadot, because the coin is positioned as the next generation of digital assets, using the latest Internet technologies and network architecture. Such a failure can seriously affect the quotes of a digital asset as an advanced means of financial transactions.

Also, the instant price jump once again underlines the main problem of cryptocurrencies, which is especially noticeable against the background of a price correction - volatility. However, the fall in the Polkadot quotes is more of a technical nature than a fundamental characteristic of the coin as a financial instrument. At the beginning of March, the entire digital asset market demonstrates very unstable indicators and can radically change the situation on the exchange in less than a day. At the same time, the market capitalization of all crypto assets again reached $1.45 trillion, and the main assets are held in their current positions without prerequisites for a fall to the level of local minimums.

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Artem Petrenko,
Chuyên gia phân tích
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