The cryptocurrency market is in the red once again in what might as well be the end of the bear run. Bitcoin has hit a fifty-day low of $6,630 as the digital currency slides fast into a danger zone. For some enthusiasts, this is a sign of some good things to come.
The low could be a signal that bitcoin is reaching the bottom of its bear run. Bitcoin is still trying to find its footing but the slump might take it to as low as $6,000 over the weekend. It is now trading at $6902 on Bitfinex. This means Bitcoin has lost a little over $2000 over seven days from its high of $8,995 – about a 20% drop.
In its characteristic high volatility, it has gained as much as $400 since early morning trading. As expected, other cryptocurrencies have also been making similarly huge losses. Top currencies except Stellar have lost anything between 1-5% over the last 24 hours. Stellar has made gains of 3.91% as of this writing defying the general market trend. A unit of now selling at $0.20.
Tax Sell Off
A tax sell off could be responsible for the concerted drop for much of this week. A drop below $6000 could see a renewed sell off.
The US tax deadline is set for mid-April and the sell off is expected to decline thereafter. We can expect the price to stabilise around that time.
Bitcoin has now lost more than a third its value at the beginning of the month. From as high as $20,000 in December 2017, the value of the highly volatile currency had dropped to as low as $6000 in early February amid increased regulatory scrutiny.
Ethereum Hit Hard
Ethereum has however been particularly hit by the current trend losing more than half its value since the beginning of March.
A new rumour has been flying around that a new chip is going to centralise Ethereum mining. The crackdown on ICOs could also be having an impact. Most of these crowd funding efforts are launched on the back of Ethereum hence its incredible success for much of 2017.
Investors are also starting to take a second look before putting their money into some of these start up projects. At the same time, these start ups could be selling their Ethereum tokens for fiat.
$100 Billion Wiped Off
Overall, about $100 billion has been wiped of the market in the last seven days alone. Total market capitalisation now stands at $262,894 according to CoinMarketCap in what might be one of the worst declines this year.
Volumes are reducing on major exchanges like Bitfinex and Binance in what could be a critical stage for the market. On the positive side, volumes are going up in the futures markets.
The market is expected to bounce back as always. Pressure from governments, technology companies and banks has been particularly intense from January and the effects are currently being felt.
Technology giants like Facebook, Twitter and Google have banned or planning to ban cryptocurrency advertisements. Governments and financial institutions have also been intensifying their calls for more regulation of the widely unregulated market.