As cryptocurrencies across the board once again take a hit, bitcoin is exploring the downside below $8,000.
The sharp recovery in prices on CoinDesk’s Bitcoin Price Index (BPI) from the Friday’s low of $7,695 ran into offers at a high of $9,471.46 at 21:59 UTC on Saturday. In the subsequent hours, the bears pushed the cryptocurrency back to $8,000.
Bitcoin dropped further to a low of $7,876.69 at 02:30 UTC today and was last seen at $7,995. The world’s largest cryptocurrency by market capitalization has depreciated by 12 percent in the last 24 hours, according to data source CoinMarketCap.
A similar price action has been seen across the market. Bitcoin cash (BCH), Ripple (XRP) are down 14 percent each, while ethereum’s ether (ETH) token has dropped 13 percent in the last 24 hours.
Hedge Funds Rushed Into Cryptocurrency Space
Unsurprisingly, given how many new crypto-millionaires had been minted, complete newbies and others with little understanding of the technology rushed in to capitalize. Many started funds with Bitcoin and other cryptocurrencies at or near all-time highs.
Because of this frenzy, some seasoned players in the space are refraining from jumping in. William Mougayar, general partner at early stage fund Virtual Capital Ventures and author of The Business Blockchain who organized Token Summit, wrote via email, “I don’t want to be in the difficult position of explaining to my limited partners 8–14 months from now why the assets have dropped by 80% within a week.”
Michael Novogratz, the former macro manager who’s turned into one of the biggest champions of bitcoin, shelved plans to start a cryptocurrency hedge fund and predicted that the digital money may extend its plunge to $8,000. Novogratz isn’t giving up on them and said he still believes they’ll be a disruptive force in finance. He had said this month that bitcoin could reach $50,000 by the end of next year — upping his previous estimate of $40,000.
Matt Siebenthal, former macro Advisor and professional trader, is another huge believer in Blockchain Technology and it’s potential to revolutionize industry. Siebenthal shared similar sentiment in December and concern with valuations while many carelessly entered the space. The founder of BlockWealth Capital also delayed plans to launch a hedge fund citing a possible correction to 7500 or lower before the cryptocurrency market- led by Bitcoin resumes it’s uptrend.
I guess we’ll see which of the 16 new funds on the block in the second half 2017 are still around after this market correction.
Despite what mainstream media will tell you, this isn’t the end of Bitcoin or cryptocurrencies. Brought to you by investoo here is a brief history of past Bitcoin corrections.
The biggest loser in the top 100 cryptos by market cap is the ethereum-based token called dent (in 75th place). The company aims to liberate mobile data by enabling users to sell or donate excess data via the ethereum blockchain.
The total value of all publicly traded cryptocurrencies hit a combined $366 billion today, its lowest figure observed for the market since Dec. 4, data from CoinMarketCap reveals.
The more than 60-day low, however, can also be read more bearishly, as it represents a more than 50 percent from the market’s all-time above $830 billion reached in early January.
Indeed, for the second time in just four days, the market is awash with double-digit declines, as in just a few short weeks a combination of new buyer fatigue and negative news appears to have taken its toll.
This time, the culprit may be speculation that new buyers may be further discouraged due to reports China could further restrict domestic buyers from overseas market resources, while major credit card issuers across the globe are reportedly restricting access to cryptocurrency buying.
Still, year-over-year, however, the figures are less bleak, as the market is up more than 1,800 percent from just $19 billion in Feb. 2017.
As such, traders may be trading the declines and otherwise taking the negative news in stride. Further data analysis reveals the market is still trading above the $355 billion total observed on Friday, when the market saw a similar period of double-digit declines.
That said, the markets are fast losing altitude.
Here’s an update of the current market prices and most recent lows:
Ethereum’s ether (ETH) cryptocurrency is trading at $783, a near three-week low. At press time, ETH was trading at its lowest level since Jan. 17.
Fresh off securing its status as the worst-performing cryptocurrency of Jan. 2018, XRP, the native cryptocurrency of the RippleNet blockchain dropped 12 percent Monday to $0.76.
Overall, however, it’s three-day low, as XRP saw lower lows on Friday when it declined to $0.63.
Another one of January’s biggest losers, bitcoin cash (BCH), which hit a low of $980.78 on Friday, was last seen trading at $1,026.
Given the cryptocurrency’s large China community, though, this response may be encouraging, as it was down 13.26 percent in the last 24 hours but above its more recent lows.
Another relative newcomer to the large-cap cryptocurrency rankings, the asset is nonetheless trading up still from recent lows.
At press time, cardano is changing hands at $0.34 today, up 25 percent from Friday figures.
Litecoin is down 12 percent at $137, but still well above last week’s low of $105.35.
That said, the situation was markedly different yesterday, when it was one of the top gainers, clocking a high of $173.80. The price rise was reportedly fueled by a fake rumor that LTC was forking. However, the rumor was dismissed by litecoin creator Charlie Lee.
STR, the native cryptocurrency of the Stellar network is changing hands at $0.34, up from Friday’s low of $0.28.
At $95.65, NEO is close to Friday’s low of $91.96.
Still, given its largely China-based community, the crypto asset may be sending a strong signal that the news today, in which the country could further restrict access to the market, may be encouraging.
EOS is trading at $8.20 — up 56 cents from last week’s low.
Notably, NEM was last seen trading at $0.50, up 13 percent from Friday’s figure of $0.44. However, it’s also notably lower than it was in late January, a time when it was making headlines for its role in a hack on a major Japanese exchange.
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