Cryptocurrency values decline sharply, with Bitcoin down 25%+, briefly below $10K, Ethereum down as much as 30%, and Ripple down 40% at one point on Tuesday
Evelyn Cheng / CNBC :
Context & Ripple Effects
This is the second leg of a drawdown that began just before Christmas, when Bitcoin fell below $11,000 on Coinbase, down 44% from its record high above $19K. After a partial recovery, the market broke again on Tuesday, with Bitcoin losing the round-number $10,000 level and the major altcoins falling harder than the original crash.
What makes this move notable is breadth: Ethereum dropping as much as 30% and Ripple about 40% intraday shows the selling is not a Bitcoin-specific repricing but a correlated wipeout across the largest coins, and the coverage shows the slide had further to run into early February.
First-order effects
- Holders of the three largest cryptocurrencies absorb steep same-day losses, with Ripple the worst hit at roughly -40% at its low and Bitcoin briefly trading below $10,000.
- The $10,000 psychological floor gives way less than a month after $11,000 did in the December crash, resetting where traders perceive support.
Second-order effects
- Because Ethereum and Ripple are falling faster than Bitcoin, capital cannot hide inside large-cap altcoins during the sell-off, pressuring the diversification pitch that drove much of late-2017 retail buying.
- Exchanges that anchored the prior crash coverage, such as Coinbase, face renewed volume and volatility stress as prices cascade through successive round-number levels.
Third-order effects
- Two crashes inside two months, each taking out the prior support level, steadily undermine the store-of-value narrative that justified the ~$19.8K peak — and the follow-on report of Bitcoin briefly dropping below $8K in early February confirms the pattern was still resolving downward.
- If boom-bust cycles of this amplitude keep repeating, the market's structure shifts toward treating cryptocurrencies as one correlated risk asset rather than a basket of independently valued protocols.
The trend: Cryptocurrency markets are settling into recurring, fully correlated boom-bust cycles in which each crash resets support lower and erodes the assets' store-of-value case.