Bitcoin Price Slips Below $4,000 in Market-Wide Slump

Bitcoin’s price fell below $4,000 briefly on Monday, extending a 24-hour slump that has shaved more than $8 billion off the total cryptocurrency market cap.

BTC/USD Update

Bitcoin reached a low of $3,980 on Bitfinex, as bearish momentum continued to mount following a late-weekend reversal. At the time of writing, BTC/USD was down 2.8% at $4,056. The $4,000 support threshold appears to be holding up for now, though a failure to return to the $4,200 range could accelerate the downward correction.

Aggregate data courtesy of CoinMarketCap show an average BTC price of $4,027 at last check.

The leading digital currency has seen a sharp rise in trading volumes over the past two weeks. On Sunday, total daily turnover across virtual currency exchanges topped $5.1 billion. Futures trading accounts for the largest share of the exchange-traded volume, with BitMEX processing nearly a quarter of BTC transactions. Research into other markets suggests over-the-counter trades are equal to or greater than the amount turned over on virtual currency exchanges.

Bitcoin’s largest spot markets on Monday were CoinBene (4.2% of total volume), OEX (3%) and Coinbit (2.8%).

The broader market fell in lockstep with the leading digital currency, as bitcoin continued to exert a gravitational pull on its peers. Altcoins and tokens lost a combined $2 billion in market cap over the past 24 hours and more than $3 billion from their peak level on Sunday.

Including bitcoin, the cryptocurrency market is valued just below $13 billion, according to CoinMarketCap. Just two days earlier, the market reached a high of $138.5 billion.

The December Factor

If seasonal factors are any indication of bitcoin’s future price, then December could be a favorable month for the leading digital currency. It was only 12 months ago that bitcoin made a legitimate run at $20,000 following months of relentless growth that was, at the end, catalyzed by the expected launch of BTC futures contracts. Years 2015 and 2016 also witnessed double-digit percentage growth for the bitcoin price in the final month.

Explosive December growth isn’t unique to bitcoin. Traditional markets such as stocks routinely outperform around the holiday season, a trend that many observers have called the Santa Claus rally.

While a December run like the one we had in 2017 or 2016 seems highly unlikely following bitcoin’s latest downturn, renewed expectations for institutional trading could generate support as we head into 2019. Intercontinental Exchange is set to launch its Bakkt trading platform in late January, opening the door to physically-settled bitcoin futures contracts. Nasdaq also has plans to enter the bitcoin futures market in the first quarter, giving investors more options to diversify into cryptocurrency.

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.

Chief Editor to and Contributor to, 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