Why bitcoin prices are staging a fresh collapse
On Wednesday, bitcoin, the world's most famous digital currency, plummeted more than 10%, crashing through $ 6,000 and trading to its lowest level since October 2017.
By the end of the session bitcoin
BTCUSD, -1.34%
closed down 11.6%, the third largest decline of 2018, only topped by the 16.5% fall on Jan. 16 and a 15.5% slide on Feb. 5, according to Dow Jones Market Data.
Even bitcoin guru and early adopter Barry Silbert, who said in July, that bitcoin would not make a new low in 2018, was stunned, summing up the move in one word: Capitulation
Capitulation
– Barry Silbert (@barrysilbert) November 14, 2018
Read: Bitcoin futures tumble 13%, trigger trading limit
With average investors licking their wounds, it's now time to look at the potential catalysts for the bitcoin crash:
Read: Do not fight the FUD: HODL on this list of bitcoin terms you need in your vocabulary
The Bitcoin Cash Hard Fork
] On Thursday, the fourth largest digital currency, Bitcoin Cash
BCHUSD, -8.41%
was set to hard fork and split into two currencies. The move has divided the crypto community with no clear consensus, TKTKwhich coin with attractTKTK the majority of miners and computing power. "This drop in price is more than likely due to the upcoming hard fork scheduled by Bitcoin Cash," said Marcus Swanepoel, co-founder and CEO of Luno, a cryptocurrency trading wallet.
"The Bitcoin Cash Blockchain has been scheduled for every six months to upgrade and improve the protocol. I de fleste tilfeller, disse hardforks er ubestridt med hele samfundet som støtter dem. In this case, however, consensus could not be reached with two factions emerging, and proposing different solutions for the upgrade. "
Read: What you need to know about the Bitcoin Cash 'hard fork'
The war of the hard fork has seen two of bitcoin's biggest personalities clash. Roger Ver, who is in favor of the status quo and Craig Wright who is championing the new Bitcoin Cash, known as Bitcoin SV (Satoshi's Vision), has been trading blows about where miners should commit their resources.
"It's safe to say That Bitcoin Cash's upcoming hard fork was stirring uncertainty among crypto investors, and forecasters across crypto and traditional markets have already predicted a prolonged bear market heading into 2019, "said Donald Bullers, a North American rep for Elastos, a decentralized software company that stores personal data .
Waning interest in digital currencies
After months in the doldrums that pushed volatility or bitcoin to record low levels, questions about overall interest in the nascent industry have grown. Data from bitcoinity.org shows a steady decline in trading volumes in 2018.
Moreover, as volumes have fallen, one analyst noted that the pace of the decline suggests adoption of digital currencies has stalled. "The speed with which cryptos crashed Wednesday indicates that there is very little fresh money, buying interest in the market and that stops were limited in size," said Nick Cawley, market analyst at Daily FX.
Read: Nearly 10% of all bitcoins have not been moved in 12 months
Technical break
For technicians, the charts told the story. The longer bitcoin held $ 6,000 without moving higher, the more vulnerable it became a sharp decline if it
"[Bitcoin] has just broken below a 12-month support band defined by the February, April, June and August-October lows , we would caution traders / investors from presuming this breakdown is a headfake, "said Rob Sluymer, technical analyst at Fundstart Global Advisors, in a research note.
Even more about the HODLers-a group of investors who relentlessly hold on to their investments despite market gyrations-Sluymer noted that the move may have further to go. "This week's breakdown raises the risk [bitcoin] will test next support near 5000 with next major, he added.
But, for true crypto-anarchists, it may take more than a 10% decline to adjust their crypto holdings. "The simple fact is that I'm not selling bitcoin in my portfolio, in fact, I'm not even interested in this day to day market action," wrote Naeem Aslam, chief market analyst at Think Markets UK
"So the recent sell-off has not changed my view about the technology or the potential it has. Wait for the currency or the debt crisis and the day it knocks on the door, guess who's going to answer the door? Bitcoin. "
Read: What's more volatile than bitcoin? You may be surprised
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