Bitcoin’s Correction Deepens as Prices Drop $1,000 from Recent High

Bitcoin’s precipitous drop intensified on Thursday, dragging other cryptocurrencies down with it as investors reacted to reports that Goldman Sachs is scrapping plans to launch a crypto trading desk.

BTC/USD Update

The bitcoin price reached a low of $6,302.20 on Bitfinex, virtually offsetting last week’s gains. At press time, BTC was down 4.9% at $6,373. Its 24-hour losses amounted to 10.2%. Last week, BTC peaked above $7,400.

Bitcoin’s sudden reversal has pushed the asset deep into oversold levels, according to the 4-hour relative strength index. Price action indicators also convey underlying weakness, with the 50-period moving average trekking sharply downward. The bitcoin price now sits roughly $300 below its 200-day period average.

At current values, BTC is capitalized at $110.8 billion compared with recent highs north of $124 billion. The coin’s share of the overall cryptocurrency market soared to 54.9%, the highest of the year. Bitcoin’s dominance rate previously peaked around 54.5% on Aug. 14.

Altcoins Plunge

Altcoins and tokens have suffered the disproportionate share of the selloff, which seems to have started over 24 hours ago. As Hacked reported Wednesday, altcoins and tokens were the first to crash on Wednesday, selling off roughly ten minutes before bitcoin.

The digital currency market’s combined value clocked in at $201.9 billion on Thursday, down roughly $40 billion from the recent high. Ethereum fell another 15.2% to $225, its lowest in a year. Bitcoin cash plunged 15.3% to $498 while EOS, the fifth ranked crypto by market cap, shed 17.1% to $5.02. XRP declined 8.8% to $0.285 while Stellar, Litecoin and Cardano each fell double-digits. All figures come courtesy of CoinMarketCap.

Trading volumes surged to $19.4 billion, a gain of nearly 50% from last week.

Goldman Sachs Reneging on Crypto Trading Desk?

The market selloff intensified on Wednesday after Business Insider reported that Goldman Sachs was shelving its plans to launch a crptocurrency trading desk. Goldman’s anticipated entry into the cryptocurrency market was heralded as a major stepping stone in pursuit of wider mainstream adoption.

Business Insider, which quoted private sources familiar with the matter, said the Wall Street mega bank will direct its efforts toward creating custody services to keep institutional money secure. As Hacked reported earlier this year, Goldman’s venture into bitcoin was driven by client interest. The latest shift reflects ongoing concerns over regulation and continued research over how to best serve the growing market.

“In response to client interest in various digital products we are exploring how best to serve them in this space,” a Goldman spokesperson told Bloomberg. “At this point, we have not reached a conclusion on the scope of our digital asset offering.”

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.

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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