After remaining stagnant at $6,400 for the better part of a season, Bitcoin (BTC) finally saw an awakening on Wednesday, as the now-1o-year-old crypto asset saw an influx of trading pressure. However, as many feared, this awakening, while powerful in its own right, wasn’t the one that many optimistic crypto investors were hoping for.
Instead of breaking above the well-cited $6,800 line of resistance, BTC fell, collapsing under $6,000, then $5,800, and finally at $5,700, where the asset is approximately situated at the time of writing. Now, for the first time in over a year, the market capitalization of BTC has fallen under the level of psychological support at $100 billion.
Seeing that this sell-side action came out of nowhere, surprising traders with their pants down, so to speak, consumers have sought to determine what catalysts sent bitcoin spiraling.
The Bitcoin Cash Hard Fork Catalyst(?)
After not covering the cryptosphere for weeks, CNBC’s Fast Money segment surprisingly brought on Brian Kelly and Meltem Demirors to discuss the potential factors behind crypto’s most recent downtrend.
Crypto melting down today and @BKBrianKelly takes to the charts to get to the root of what exactly happened. pic.twitter.com/O6bAZ0O4Nm
— CNBC’s Fast Money (@CNBCFastMoney) November 14, 2018
Kelly, who has been the topic of light controversy in the past, drew attention to the upcoming Bitcoin Cash contentious hard fork. The BKCM CEO, who dubbed the Bitcoin ABC and Bitcoin SV debacle “a crypto civil war,” attributed this market’s most recent decline to concerns that BTC and BCH markets, along with the networks they represent, will under-perform as the hard fork comes to pass.
Related Reading: BCH Fight: Bitcoin Cash Bashing Heats Up, Rivals Duke it Out Ahead of Hard Fork
Andy Bromberg, co-founder and president of CoinList, echoed Kelly’s comments on the looming hard fork, telling the Wall Street Journal:
“A single event, like a fork, can be a significant factor across wider crypto markets thanks to their relative immaturity… Large holders will often make trades across multiple coins, causing ripple effects beyond the asset that instigated the movement.”
However, discussing the potential Bitcoin Cash “catalyst,” Mati Greenspan, eToro’s in-house crypto savant, begged to differ. Commenting in response to Bloomberg’s piece on crypto’s sell-off on Wednesday, Greenspan pointed out that the hard fork catalyst is invalid, alluding to his thought process that the reasoning behind the catalyst is evidently flawed.
This sentence literally makes no sense…
“Some traders speculated that investors may be leaving Bitcoin to raise funds to buy Bitcoin Cash after it splits in anticipation that each of the new coins will appreciate.”
— Mati Greenspan (@MatiGreenspan) November 15, 2018
NewsBTC’s Joseph Young made a similar comment, noting that BCH actually under-performing BTC, rendering Bloomberg’s claim false.
Keeping this in mind, Charlie Hayter, the founder of London-based CryptoCompare, addressed Bitcoin’s most recent move lower with a bit more caution. More specifically, Hayter was hesitant to bring attention to a specific catalyst. Still, countering Crypto Rand’s recent call that the collective value of all crypto assets had broken out of a falling wedge, the CryptoCompare executive noted in a Reuters interview:
“What you are seeing… is a breakout on the downside. Sometimes when things happen, it takes a while for the true reason to become clear – an exchange trade or regulatory action.”
Related Reading: Prominent Analyst: Crypto Market is Undergoing a Clear Breakout
Barry Silbert, the show-runner at New York-based Digital Currency Group, simply chalked this recent rut to a round of “capitulation.” In the eyes of some analysts, a phase of capitulation could be seen as a perpetuation of the bear market, but, others have claimed that these strong sell-offs could signal that BTC has bottomed.
The bottom line is that everyone and their dog has different opinions about bitcoin’s recent move under $5,700, indicating that there were likely a number of stimuli, including the aforementioned, that beckoned the bears in.
Even Nouriel “Dr. Doom” Roubini, the now-infamous NYU Stern professor that bashes Bitcoin incessantly, had something to say about the market’s most recent collapse, doubling-down on his anti-crypto sentiment. In a controversial tweet, which came just a few hours after BTC moved under $6,000, Roubini noted:
“I could gloat about Bitcoin collapsing 10% in a day to $5700. But that is still some way to ZERO where Bitcoin belongs. Actually since Bitcoin is The Mother of All Toxic Pollutions & Environmental Disasters its true fair value is highly NEGATIVE with the right externality tax.”
Although Robuini’s aforementioned bashing of Bitcoin isn’t a welcome sight, many analysts and industry leaders have maintained that the world’s first blockchain is poised to succeed in the years to come. As reported by NewsBTC previously, industry players, like Tim Draper, Tom Lee, and Mike Novogratz, have expressed their overt opinion that bitcoin is likely to surmount its all-time high at $20,000 in due time.
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