The cryptocurrency market is in free fall as it drops to the lowest level in 13 months, with Bitcoin’s market cap going below $87 billion.
Bitseven.com - Bitcoin, together with the entire cryptocurrency space, is in a free fall. On Monday, it broke below $5,000 for the first time in about 13 months, and struck a year-to-date low. During the last 24 hours, Bitcoin has lost about 12% and is trading at $4,970, according to Coinmarketcap data as of 18:00 UTC. The rest of the coins are not doing better – Ethereum, EOS, Litecoin, IOTA, Tron, and Monero has dropped by over 11% for the day, with Ripple recording a more moderate decline of nearly 3%. The total market capitalization is currently at around $164.8 billion, the lowest since October 25, 2017.
Some crypto watchers believe that the bearish trend is driven by concerns over increased regulation, which push utility token issuers to liquidate their crypto holdings in exchange for fiat money or other assets. On Friday, we reported that the US Securities and Exchange Commission (SEC) imposed two initial coin offering (ICO) firms, Paragon and Airfox, to register their tokens as securities and compensate investors who took part in the ICOs.
Justin Litchfield, CTO at ProChain Capital, was cited by Bloomberg as saying:
“The selloff is related to enforcement, which is almost certainly underway. Projects are being made to return investor money, which, after having spent a ton of money marketing their $100 million ICO on a lavish party-filled road-show that was the norm for this vintage of ICOs, will be tough.”
However, the real problem that hurts the market sentiment is the so-called civil war in the hard fork of Bitcoin Cash, which was recently split into two versions – Bitcoin Cash ABC and Bitcoin Cash SV. Bitcoin Cash’s miners and developers cannot agree on the future direction, so they continue to fight for dominance in the hashing power in order to take control over the network. During this battle, major crypto exchanges around the world have taken different positions, which pushes the community to lose confidence in the market as a whole.
Craig Wright, the controversial figure behind Bitcoin Cash SV, warned that Bitcoin would be depressed during this “civil war,” as the groups behind this battle are forced to sell Bitcoin in order to support their cause.
These negative factors are putting immense pressure on Bitcoin, which is followed by the rest of the cryptocurrencies.
Bitcoin closes in red for the eighth day in a row – a record for the largest and oldest cryptocurrency, which recently had its ten year anniversary.
What’s more worrying is that things might get uglier, according to some analysts. eToro analyst Mati Greenspan stated in a note to clients seen by Cryptovest:
“The next logical level of support is at $5,000 but if that doesn't hold, the next logical support level isn't until $3,500. With all the falling prices lately, this definitely fits the definition of a buyers market.”
Last Friday, Bloomberg Intelligence noted that the collapse was just starting, with analysts anticipating that the price of Bitcoin would decline to $1,500, which would be the lowest level since May 2017.
Ethereum has demonstrated even worse results and has already dropped to the lowest level since July 2017. Ethereum has been the most popular blockchain network for ICO issuers, as they used to rely on the ERC-20 token standard.
As the crypto market goes through some dramatic periods, stablecoins are thriving, with Circle’s USDC, True USD, and DAI recording a more than a 200% increase in daily trading volume, according to Coinmarketcap data.
Interestingly, at the time of writing, Credo was the only coin in the top 200 cryptocurrencies to display a daily gain.