He also said that even despite the fluctuations, the Bitcoin price of $100,000 is still possible.
Earlier in the day, cryptocurrency platforms such as Binance and Coinbase saw service disruptions after cryptocurrencies from Bitcoin to Ethereum plunged. Bitcoin, in particular, briefly dived below $30,000 after China banned financial and payment companies from providing services related to cryptocurrency transactions.
"A major reason for the large fall in price was because of leveraged traders on exchanges getting liquidated leading to other leveraged traders being liquidated too. There was too much leverage being used and this was a much needed wipeout to bring it to a healthy level again," Ong said.
In recent weeks the crypto market has been "in very frothy territory," with prices having gone up too much and too fast, according to the Bitcoin expert.
"The market was searching for a reason to decline and Elon Musk's tweet that Tesla was no longer going to accept Bitcoin, and then this news from China banning financial institutions from dealing with crypto businesses are the major catalysts providing the downfall," Ong said.
When asked whether Bitcoin can still reach $100,000 in 2021 after all these disruptions, he replied that it is always hard to make predictions.
"For all we know the $64k Bitcoin we saw in mid-April was the top for this cycle. That said, I think $100k BTC [bitcoin] is still possible and these sudden price declines are just part and parcel of the crypto markets," he said.
Fundamentally, nothing has changed for Bitcoin and Ethereum, Ong noted.
"It's just the price that has gone down - they can still be trusted. There are a lot of developments being planned for Ethereum this year as it moves towards Ethereum 2.0," he said.
In April, Bitcoin price jumped up to a historic high of over $64,000. However, a month later, the cryptocurrency started to fall after Musk said that Tesla would stop selling electric cars for Bitcoin, citing concerns over fossil fuel use during mining. In the wake of the Bitcoin dive, the tech enthusiast was accused of manipulating cryptocurrency markets.
