fbpx
Money

Bitcoin Dips Below $5,400 For The First Time In 2018

Bitcoin prices dropped significantly today, falling below $5,400 and reaching their lowest since late last year.

The digital currency declined to as little as $5,390.12, losing more than 10% in the space of 24 hours and hitting a fresh 2018 low, CoinDesk price data reveals.

This downward movement took place as the broader cryptocurrency market also suffered notable losses, declining from a total value of $210 billion earlier in the day to almost $180 billion by roughly 15:30 UTC (approximately 10:30 a.m. ET), according to CoinMarketCap.

When explaining what caused the sharp decline in bitcoin prices, analysts generally pointed to either technical analysis or the uncertainty surrounding the upcoming hard fork in bitcoin cash.

Bitcoin Cash Hard Fork FUD

Several analysts emphasized the uncertainty surrounding the hard fork that is scheduled to take place in bitcoin cash, currently the fourth-largest digital currency by market capitalization on CoinMarketCap.

Craig Wright and Roger Ver, both major proponents of bitcoin cash, have begun advocating for two different versions of the digital currency.

“The end result will most likely be a split in the network resulting in two different versions of Bitcoin Cash when both upgrades go into effect this Thursday,” Mati Greenspan, senior market analyst at social trading platform eTorotold Business Insider.

“There is a tremendous amount of FUD surrounding the Bitcoin Cash hard fork,” said Joshua Frank, co-founder of cryptocurrency analytics platform TheTIE.io.

“It seems like there is a lot of confusion in the market as to what is driving price and who will emerge as the winner in the BCHABC vs. BCHSV fight,” he added. Frank stated:

We have seen this FUD and confusion in Twitter conversations. This is reflected by the fact that Bitcoin Cash has had sentiment volatility three times higher than any other major cryptocurrency over the last 24 hours and BCH’s tweet volume is 217% higher than its 20 day moving average.

With the uncertainty expressed by crypto traders on Twitter, both the short and long-term sentiment of Bitcoin Cash remain negative. It will be interesting to see how the sentiment of BCHABC vs. BCHSV as well as miner adoption play out over the next 48 hours. We anticipate this having a strong impact on future price movement.

Technical Developments

While Frank emphasized sentiment, other analysts pointed to market factors when explaining bitcoin’s recent sharp drop.

“As far as I can tell this move is more technical in nature,” said Greenspan.

Eric Ervin, CEO of Blockforce Capital, offered a similar perspective, stating that “the recent price plunge is a cause of purely technical moves.”

“The significance of the $6,000 support level shouldn’t be understated. As the bear market has trudged along these past few months, that level has held steady,” he noted.

As a result, “many investors have come to see it as a stop-loss measure. This would explain the large amount of liquidations that have occurred.”

“Looking forward, today’s price drop may be a blessing for the asset as it could help push the market to a bottom, after which it can bounce back,” added Ervin.

Dual Headwinds

While some analysts chose to emphasize either the uncertainty surrounding the bitcoin cash hard fork or instead technical analysis, others asserted that the market’s price movements were the result of both.

Tim Enneking, managing director of Digital Capital Management, was in this camp.

“The markets have been incredibly soft and the BCH fork simply provided the catalyst for a drop that’s been waiting to happen for a while now,” he said.

Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital, provided a similar point of view.

“Today’s sharp drop in Bitcoin price is a result of both the Bitcoin Cash dispute (the upcoming fork) and the increasing pressure on the $6K price point.”

He noted that “Over the last several months, that price point has been repeatedly tested, and bounced back above it but to lower and lower highs.”

“While many were seeing the rebuffing of the $6K price point as support, at BitBull we argued that the more the $6K price point is tested, the more likely it was to break.”

DiPasquale emphasized that as market participants aim to spread FUD, it provides a catalyst for sell-offs.

As a result, many traders may simply “adopt a wait and see” approach until things calm down, he concluded.

This story originally appeared in Forbes. Image courtesy of Shutterstock.

Join The Discussion

Trump's Plan To End Shutdown Falls Flat
Trump’s Plan To End Shutdown Falls Flat [Video]
World's 26 Richest People Own As Much As Poorest 50%
World’s 26 Richest People Own As Much As Poorest 50%
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed [Video]
Brexit Plans In Chaos After UK Parliament Rejects Proposal
Brexit Plans In Chaos After UK Parliament Rejects Proposal [Video]
How To Buy Bitcoin Anonymously
How To Buy Bitcoin Anonymously
Number Of Bitcoin ATMs Hits 4,000 Globally
Bitcoin ATMs Hits 4,000 Globally-Why Is It Growing So Fast?
Is Bitcoin Building Support Above $3,500
Is Bitcoin Building Support Above $3,500?
Belarus Allows Traders To Buy Shares With Bitcoin
Belarus Allows Traders To Buy Shares With Bitcoin
10 Marketing Trends To Watch In 2019
10 Marketing Trends To Watch In 2019
40+ Video Marketing Statistics For 2019
40+ Video Marketing Statistics For 2019 [Infographic]
Emerging Email Marketing Trends To Survive 2019 And Beyond
Emerging Email Marketing Trends To Survive 2019 And Beyond [Infographic]
Visual Trends To Be Aware Of In 2019
Visual Trends To Be Aware Of In 2019 [Infographic]
The Latest Social Media Automation Rules In 2019
The Latest Social Media Automation Rules In 2019
4 Tips To Help You With The Constant Changes In Social Media
4 Tips To Help You With The Constant Changes In Social Media
Instagram's Testing Side-Scrolling Feed View, Similar To Stories
Instagram’s Testing Side-Scrolling Feed View, Similar To Stories
The 10 Best Instagram Tools For 2019
The 10 Best Instagram Tools For 2019
What Is Your Therapist Listening For
What Is Your Therapist Listening For?
Wish You Were Smarter
Wish You Were Smarter? These 4 Brain Hacks Can Help You Get There
Weightlifting Less Than An Hour Per Week Could Increase Your Longevity
Weightlifting Less Than An Hour Per Week Could Increase Your Longevity
Your Environment May Affect Your Eyes More Than You Realize
Your Environment May Affect Your Eyes More Than You Realize
Trump's Plan To End Shutdown Falls Flat
Trump’s Plan To End Shutdown Falls Flat [Video]
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed [Video]
Brexit Plans In Chaos After UK Parliament Rejects Proposal
Brexit Plans In Chaos After UK Parliament Rejects Proposal [Video]
Coming To Canada 'Worth The Risk,' Says Saudi Teen Refugee
Coming To Canada ‘Worth The Risk,’ Says Saudi Teen Refugee [Video]