Bitcoin Price Plunges 10% in Market-Wide Correction
Bitcoin’s price swung sharply lower on Tuesday, as traders took profits following a large upsurge over the past five days. The leading digital currency has found support well north of $3,700 as trade volumes dipped from their recent highs.
The bitcoin price declined sharply across major exchanges, and was last down 10% to $3,765.90, according to CoinMarketCap. That downward movement is based on trading volume of $6.4 billion.
Bitcoin surged more than $1,200 peak to trough in the last ten days, culminating in highs of around $4,300 at the beginning of the week. On at least one exchange, Bitfinex, BTC/USD peaked near $4,400. Read more: Digital Gold? Bitcoin Price Notches New December High.
A similar downtrend was observed across the entire cryptocurrency market on Tuesday. The crypto market cap is down more than $20 billion from its recent peak and is currently valued at $126.7 billion. Total trade volumes reached $21.8 billion.
Bitcoin’s share of the overall market has strengthened by nearly 2 percentage points to 52.1%. As Hacked reported on Monday, bitcoin’s market dominance fell to five-month lows amid the latest uptrend. Read more: Bitcoin’s Market Dominance Nears 50% for the First Time in Five Months.
Bitcoin has become a difficult commodity to kill despite dozens of internet obituaries over the past two years. Speculators and prognosticators declared ‘bitcoin is dead’ on 90 occasions this year, according to 99 Bitcoins. Year 2017 racked up 125 obituaries for the leading digital currency.
Of course, bitcoin is not only very much alive, its adoption as an asset class is growing steadily. Case in point: the world’s largest stock exchange operator, Intercontinental Exchange, is launching its very own bitcoin futures market sometime in Q1. Nasdaq, which operates the largest electronic stock exchange on the planet, is also venturing into bitcoin futures sometime in Q2.
What’s more, bitcoin has become too decentralized to destroy via government intervention, bear markets and other forms of downward pressure. Although miners respond to incentives, their recent exit from the market doesn’t mean bitcoin is in a death spiral (as was recently claimed by Santa Clara University Professor Atulya Sarin). It simply means that, for many in the ecosystem, mining is no longer feasible at current market prices.
Adoption of bitcoin, and crypto more generally, as an asset class could grow next year should the bear market on Wall Street intensify. There’s strong reason to believe that ICE’s bitcoin market, which is based on physically delivery of BTC, could have a dramatic influence on the spot price. CBOE and CME futures market have had a positive impact on bitcoin from the perspective of volatility. There’s reason to believe that physically-backed bitcoin futures could have a similar effect.
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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