Bitcoin Price Carves Out New Lows as Crypto Carnage Intensifies
Bitcoin’s price plunged anew on Tuesday, reaching the lowest in over 13 months and signaling no end to the downtrend that began early last week.
The leading digital currency dropped below $4,300 on Coinbase for the first time since early October 2017. At the time of writing, bitcoin was trading at $4,380, down a whopping 14.4% compared with Monday.
As is usually the case, bitcoin was trading higher on Bitfinex, which processes a large volume of BTC/USDT transactions. Bitcoin was last seen trading hands at $4,587 on the exchange.
Aggregate data provided by CoinMarketCap shows an average price-per-coin of $4,489. Over the past seven days, bitcoin has lost nearly a third of its value. The bulk of the declines have been concentrated in the last few days.
Volumes spiked above $8 billion on Tuesday for the first time in four months, with derivatives trading accounting for a growing share of the total turnover. BitMEX, the most popular crypto derivatives platform, processed more than 41% of bitcoin transactions on Tuesday. No other exchange even came close in terms of volume.
At current values, bitcoin has a total market capitalization of $77.9 billion.
Search for a Bottom Continues
The extent of the recent selloff has largely negated the need for technical analysis in predicting future price movements, as bitcoin is clearly in a panic-induced selloff that could intensify in the near term should higher volumes come into play.
Following last week’s skid, analysts at Bloomberg predicted that bitcoin’s price could fall to $1,500 – levels not seen since May 2017. The analysts said that the hard fork of bitcoin cash could be partly responsible for the selloff by “sucking investment and miners away from the largest cryptocurrency.”
Craig Steven Wright, one of the main backers of the bitcoin SV chain, has threatened to sink bitcoin if existing BTC miners switch over to mine bitcoin ABC. The so-called hash war between the competing chains has intensified in recent days with Wright’s camp vowing to play the long game to ensure their protocol succeeds.
While it’s not entirely clear just how deep bitcoin’s correction can go, investors are cautioned against playing the long game at this time. The $4,000 level is the next major inflection point being eyed by market participants.
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.
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