What Happened to Bitcoin’s Value and Why Did BTC Price Free Fall so Fast?
On November 14, Bitcoin experienced a very hard drop. Its price moved from $6,370, down to $5,556 dollars in less than half a day. Trading volumes have also increased during the last couple of hours. It increased from $4.4 billion dollars to $8.2 billion dollars. This is the lowest price experienced by Bitcoin in the last year.
However, Bitcoin was not the only virtual currency to experience such a hard drop. Most of the virtual currencies in the market, with the exception of stablecoins such as TrueUSD or USDC.
Some cryptocurrency experts believe that the situation is related to the uncertainty surrounding the Bitcoin Cash (BCH) hard fork while others think that this is strictly technical.
Bitcoin Cash is currently experiencing a network upgrade that will be dividing the network in Bitcoin SV and Bitcoin ABC. Until now, there is no clear answer about which of these coins will be the winner. What we know is that Bitcoin SV has a larger support from Bitcoin miners, which is very important to keep the network going. Bitcoin ABC has a stronger support from the community but not from miners.
Bitcoin ABC is being backed by Jihan Wu, founder and CEO fo Bitmain, and Roger Ver, known for being ‘Bicoin Jesus’ and one of the earlier promoters of Bitcoin. Bitcoin SV is backed by nChain founder, Craig Wright, who has called himself the real Satoshi Nakamoto.
According to Mati Greenspan, a senior market analyst at eToro, there will be a split in the Bitcoin Cash network.
Joshua Frank, the co-founder of TheTIE.io, explained that there is a lot of FUD related to the Bitcoin Cash hard fork.
Frank said about it:
“We have seen this FUD and confusion in Twitter conversations. This is reflected by the fact that Bitcoin Cash has had sentiment volatility three times higher than any other major cryptocurrency over the last 24 hours and BCH’s tweet volume is 217% higher than its 20 days moving average.”
With this volatility and uncertainty that can be seen and experienced by traders on Twitter, the long and short-term sentiment of Bitcoin Cash remains negative.
Greenspan, instead, said that the prices in virtual currencies dropped because of technical issues. This is similar to what Eric Ervin, CEO of Blockforce capital believes. He offered a similar perspective about it.
During the last months, the $6,000 mark has played a very important role in the market. This mark worked as a support level during the last months. This is why there were several investors that placed stop losses close to $6,000. Once the price crossed this point, many investors started to liquidate their ‘stop-loss’ measures.
Nevertheless, Ervin looks positive for the future. He said that this price drop could be very healthy for the asset because it can help the market reach a bottom and bounce back from it. In December and the beginning of 2019, there are some important developments that might help the price of Bitcoin to start growing once again.
It is always important to understand that there might be several issues related to a price action such as the one experienced on November 14. Time Enneking, managing director of Digital Capital Management, said that the Bitcoin Cash hard fork has just triggered what the market was waiting for a long period of time.
Charles Bovaird, financial writer at Forbes quoted Joe DiPasquale, CEO of BitBull Capital saying that this drop is related to both issues.
“Today’s sharp drop in Bitcoin price is a result of both the Bitcoin Cash dispute (the upcoming fork) and the increasing pressure on the $6K price point,” said Mr. DiPasquale. “Over the last several months, that price point has been repeatedly tested, and bounced back above it but to lower and lower highs.”
At the time of writing, Bitcoin (BTC) is being traded around $5,660 dollars. It has also a market capitalization of $98.3 billion dollars. XRP was also able to take the second position in the cryptocurrency market after surpassing Ethereum (ETH). XRP has a market capitalization of $18.53 billion dollars and Ethereum of $18.49 billion dollars.
Bitcoin Cash, that will soon have a network upgrade is traded around $443 dollars and it has a market capitalization of $7.73 billion dollars.