The price of Bitcoin dropped to the $8,100 region on Sunday, 10 May 2020, after embarking on a rally that saw it attempt to break the $10,000 mark.
Bitcoin Drops by 10% in Half an Hour
The leading cryptocurrency embarked on a mini-rally last week as we approach the Bitcoin mining halving event. The price of Bitcoin, which surged nearly to the $10,000 mark, dropped to the $8,100 mark on Sunday, losing more than 10% of its value in less than 30 minutes.
The decline in the price of BTC and its subsequent effect on the general cryptocurrency market could be tied to Coinbase losing connection for a brief period. Coinbase, which is amongst the largest and most widely used cryptocurrency exchanges in the world, reported that its website, mobile app, and API website experienced partial outages. The outage started at 17:26 Pacific time (00:26 UTC).
Ten minutes after the outage, Coinbase notified its users that it was still investigating to find out what caused the power outage. Prominent Twitter accounts noted the outage by Coinbase, and this triggered the price of Bitcoin to tumble from $9,500 to $8,100 within 30 minutes.
By 18:14 on the West Coast, the San Francisco-based company notified its customers that its services had been restored on both the retail and professional trading platforms. However, a spokesperson for Coinbase declined to comment beyond the information provided on the status page, which mentioned that the company was looking into the outage situation.
While Coinbase was experiencing downtime, other leading US cryptocurrency exchanges, like Kraken, were fully operational. The outage should be a concern to Coinbase as the exchange experienced a similar situation last week after Bitcoin went up by 15% to reach $8,900. At the moment, the trading volume on Coinbase is not as high compared to the peak volumes it recorded over the past two weeks.
According to data obtained from Skew, the daily trading volume on Coinbase was just above $100 million, which is below the average $300 million reported over the past two weeks. Leading cryptocurrency exchanges such as Coinbase are prone to experiencing outages during a period of price volatility.
Bitcoin Halving Event
The Bitcoin halving event is set to take place tomorrow, Tuesday, May 12. The event will see the reward for mining a block on the Bitcoin network drop to 6.25BTC from its previous 12.5BTC. This will be the third time the mining reward will be halved on the Bitcoin network, and cryptocurrency enthusiasts expect the prices to surge higher after the event.
Historically, Bitcoin has always performed excellently after a halving event. The last reward halving in 2016 saw the price of the leading cryptocurrency rally to its all-time high of $20,000 by the end of 2017. At the moment, some market experts and cryptocurrency enthusiasts expect the next rally to surpass the $20,000 mark and it will likely see Bitcoin establishing a new all-time high.
As the crypto space continues to debate the price movement of Bitcoin ahead of the halving event, incidents such as the one that affected Coinbase today could hinder the progression of Bitcoin as investors do not like the sight of exchanges experiencing outages.