Bitcoin Sees Sharp Correction, Triggering Wider Market Selloff
Bitcoin’s price declined quickly and suddenly Thursday morning, eroding an entire week’s worth of progress in less than one hour. The downtrend exerted a gravitational pull on the broader market, with altcoins and tokens losing $6 billion over the same short period.
Bitcoin reached a session low of $3,790.22, according to CCN’s price tracker. That’s a significant reversal from the daily high of $4,089.52. Aggregate data courtesy of CoinMarketCap currently show an average price of $3,825.68, a decline of 5.7%.
On individual exchanges, BTC/USD clocked in around $3,785 on Coinbase and Bitstamp. It was trading hands at $3,882 on Bitfinex.
Trading volumes rose sharply overnight, reaching a 24-hour total of $6.3 billion. The BitMEX derivatives market accounted for nearly 17% of the volume.
The leading digital currency first returned above $4,000 on Sunday and eventually reached new multi-week highs. Prices would eventually peak north of $4,100 before resuming a stable trading range. Hacked observed a narrowing of trading activity on Wednesday, along with a sharp decline in volatility.
Unless bitcoin is able to quickly return to the $4,000 range, it remains vulnerable to a bigger pullback in the near term. This would align with the view that the bottoming process has yet to conclude. As a refresher, bitcoin dropped to a low near $3,100 in early December before staging a recovery.
As is often the case, a sharp move in the bitcoin price had a direct and noticeable impact on the broader cryptocurrency market. Altcoins and tokens lost a combined $6 billion in value, with Ethereum, bitcoin cash and Litecoin each facing double-digit losses.
The pullback in Ethereum, amounting to an 11.6% decline, dragged prices back down to $134. That pushed ether back into third place on the market-cap ranking with a total value of $14 billion.
XRP swung back into second place, though it fell 6.2% to $0.3466.
Tron had the most measured response to bitcoin’s sudden drop in value. TRX was down 1.5% to $0.02718 following a massive bull run throughout the week.
The combined value of all cryptocurrencies is down roughly $10 billion to $127.7 billion. Total trading volumes reached $20.7 billion.
The decline in altcoins and tokens is perhaps more easily digestible given the rapid advance seen over the past week. Ethereum has been a standout performer as of late as demand for the developer’s cryptocurrency surged in anticipation of the Constantinople upgrade. More on this story can be seen in the latest Price Prediction: Ethereum Relaxes on Its Journey to Constantinople.
A 51% attack on Ethereum Classic (ETC), which was confirmed by Coinbase Tuesday, appears to have had a minimal impact on the market. The network lost more than $1 million during the attack. ETC is currently down 9% after stabilizing on Wednesday. Read more: Ethereum Classic Risks Permanent Damage After Alleged 51% Attack.
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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