Crypto Carnage Resumes as Bitcoin Comes Within $500 of Yearly Low
Cryptocurrencies suffered yet another selloff on Tuesday, as bitcoin approached new lows for the year and Ethereum fell below a key psychological level.
Market Update: Downtrend Continues
Crypto markets bled more than $20 billion on Tuesday, including a flash crash that wiped out $10 billion in the span of 30 minutes.
The market capitalization for all coins is $281 billion, the lowest since early April. Values are down more than $60 billion since Friday.
After a brief uptick in trade volumes, total turnover for the day was back around $15 billion. Daily transactions averaged between $13 billion and $15 billion over the past week before spiking to $20 billion on Monday.
None of the major assets listed in the top-ten were spared losses. EOS emerged once again as the biggest laggard, falling more than 11% over the past 24 hours to trade at $10.16. EOS is currently struggling with a PR crisis after its mainnet launch stalled.
Bitcoin established a new 70-day bottom at $6,495.13, as prices came within $500 of the February swing low. The world’s largest cryptocurrency by market cap and trading volume was last down more than 4% at $6,562.
Ethereum prices swung back below $500 after falling nearly 7% on Tuesday. ETH/USD is currently valued at $491.
The selloff also hit bitcoin cash, which declined by almost 9% to $864.
Near-Term Outlook Deteroriates
With bitcoin eyeing $6,000 as the next critical support, there’s little doubt that crypto assets are in the midst of a protracted bear market. Although several theories have attempted to explain the downtrend, one likely explanation is the sudden exit of long-term holders. For this reason, some analysts believe we have not yet seen the bottom for assets like bitcoin.
The factors contributing to the market’s collapse may be debatable, but there’s no denying that prices are severely oversold. It remains to be seen whether retail buyers will rush back into the market or whether institutional capital will deliver the next leg of the great crypto rally. In any case, the general belief in the investment community is that the latest carnage is just one of many setbacks for a market poised for tremendous growth.
Crypto trader and CNBC contributor Ran Neu-Ner provided a good analogy for where we are today when he appeared on the Monday edition of “Fast Money”:
“We’re the internet before you had a real browser. And people are talking about a few exchange hacks. Those are to be expected from an industry that’s got a market capitalization of $300 billion; when we expect that one day this thing is going to have $20 trillion.”
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.