Bitcoin Crashes to New Yearly Low; Bears Eye $3,000

Bitcoin’s price plunged on Friday to its lowest level since September 2017, underscoring the bearish forces still at play in the cryptocurrency market. With the exception of bitcoin SV and Tether, all major cryptocurrencies in the top 20 reported brutal declines.

BTC/USD Update

The bitcoin price reached a session low of $3,368 on Bitfinex, marking a new bottom for the year. BTC/USD was last trading hands at $3447, where it was down 2.4% on the day. Aggregate data courtesy of CoinMarketCap show a 24-hour drop of nearly 9% for the leading digital currency.

Trading volumes, which have been elevated all week, reached a high of $6.5 billion amid the selloff. BitMEX dominated the market activity, signaling once again that short positions via bitcoin futures were playing a major role in the carnage. Over the past 24 hours, nearly one-third of bitcoin trades placed on virtual currency exchanges came via BitMEX. In terms of spot markets, CoinBene, Binance and OKEx were the largest, according to CoinMarketCap.

The overall cryptocurrency market cap, which includes bitcoin, altcoins and tokens, fell to a low of around $106.2 billion. That was the lowest level since August 2017. Bitcoin SV maintained its contrarian posture relative to the leading digital currencies, gaining 5.8% to $104.14. BSV briefly overtook bitcoin cash and Tether to become the fifth largest cryptocurrency by market cap. It has since fallen back to seventh place where it trails BCH by roughly $11 million.

The largest 24-hour drop occurred on EOS, where prices fell a whopping 21.1% to $1.71.

A Drop to $3,000 Likely

As Hacked reported on Thursday, downward pressure on bitcoin’s price seems unavoidable given the large influx of trading volume observed over the past week. While BTC experienced a significant relief rally late last month, the gains merely facilitated a renewed dump of the currency once prices reached $4,500. Each subsequent rally has been dumped by the profit-taking crowd, which made it difficult for bitcoin to sustain the $4,000 mark.

At this stage of the game, the market seems keen on taking bitcoin to new yearly lows, which puts the psychological $3,000 level at jeopardy of being breached. Bitcoin last traded in this region all the way back in August 2017. It would also test those levels in September after the People’s Bank of China (PBOC) pursued a blanket ban on cryptocurrencies.

Bitcoin is down a whopping 83% from its all-time high. Most of its peers have lost in excess of 90% from peak levels. As the total market cap continues to bleed, bitcoin is exerting an even greater gravitational pull on the market. Following the selloff on Friday, BTC accounted for 55.2% of the total cryptocurrency market capitalization.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi

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