Yesterday was not a good day for cryptocurrency traders as they saw one of the worst performances of the market so far this year. With Bitcoin’s value dropping below $6,000, the anxiety of yet another downfall has been keeping everyone on the edge of their seats.
The entire cryptocurrency market saw a loss of more than 10% of its market cap in less than 24 hours. Bitcoin led the dive, falling nearly 4.5% to cross below the $6000 mark before clawing its way back up to $6,082.
Current market conditions are a far cry from the run-up in December 2017 that saw Bitcoin soaring above 19,000. The popular cryptocurrency’s comparatively dismal performance in 2018 thus far has left many investors shaken, with some convinced that prices could go even lower.
Writer and crypto technical analyst Omkar Godbole wrote:
Looking ahead, the downtrend in bitcoin prices could continue as the technical chart analysis is calling a deeper sell-off – although support at $5,650 could hold for now.
What is Causing the Crash?
According to CoinMarketCap, the top 92 cryptocurrencies suffered a double-digit percentage blow in just less than 24 hours. Some of the poor performances included Ethereum falling to $263 (7.3%), XRP dipping to $0.26 (5.6%), Bitcoin Cash slipping to $489 (7.9%) and Litecoin falling to $50 (10.1%).
Crypto experts and novices alike have been speculating as to what could be causing the market-wide bleed out. While nobody has yet to come to a definite conclusion, some of the prevailing theories include:
- The SEC’s postponement of its decision regarding the VanEck Bitcoin ETF until September
- Increased occurrences of ransomware attacks and phishing and extortion scams
- FUD and misinformation from cryptocurrency critics
These events – particularly the scams and FUD – have cast the entire cryptocurrency market in a negative light which is reflected in its total market cap dropping by nearly $80 billion just since the beginning of August.
Remembering the Positive
In the midst of all of these problems, it is easy to forget the positive developments being made in the cryptocurrency space.
Last week, the New York Stock Exchange’s (NYSE) parent company announced the launch of a new cryptocurrency platform named Bakkt that will enable users to easily buy, sell, store, and spend digital assets.
In the US, several states are beginning to embrace blockchain and cryptocurrencies. Wyoming, for example, recently signed off on five new laws and amendments designed to foster their development. Digital assets are the future and they know it.
Even though the market is down, there is plenty of good news hovering in the crypto ecosystem giving clear signs that, while cryptocurrency may be down, it most certainly is not out.
What do you think is causing the current market downturn? What is needed to bring about a reversal? Let us know in the comments below.
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