Volatility Returns: Bitcoin Plunges 7.5%, Litecoin Near $1.30

Volatility has returned to the crypto markets today, with bitcoin (BTC/USD) prices plunging as much as 7.5% to $214 on

Volatility returned to the crypto markets today, with bitcoin (BTC/USD) prices plunging as much as 7.5% to $214 on BTC-e.Bitcoin is currently trading at $218.

Today’s prices are the lowest since early February when bitcoin touched $208. Another break of the psychologically-key $200 mark would likely trigger another round of volatility not seen since early January, when bitcoin fell into the $150s.

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The drop transpired over a 12h period, making for the sharpest decline in nearly three weeks. Volume reached nearly 3,000 BTC/hour at the start of the plunge, when losses were steepest, but tapered off to below 1,000 BTC/hour towards the latter stages. The behavior would suggest that the latest sell-off may have been set off by oversized sell orders or early adopters dumping their holdings, although volume has been steadily rising again during the past few hours.

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Overall, bitcoin prices have shown relative stability following their early January slump, although with a few bumps along the way. But in April, they gradually gravitated back toward the low $230s, and in recent days, briefly pierced their short-term support level on a couple of occasions. This may have upset the prevailing equilibrium and ultimately spurred today’s sell-off.

Prices are now 15% below their 50-day moving average (MA), their biggest offset since early February.

Litecoin has plunged to its lowest levels since late January, falling as low as $1.31. The LTC/BTC rate has dipped below 0.0061, the lowest since mid-January when it breached 0.006. Litecoin’s losses have thus outpaced those of bitcoin, representing a return to more traditional behavior and more typical for unsettled periods.

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