The price of Bitcoin recorded a sharp decline, dropping £771 ($1,000) overall in a day to trade a little above £4,939 ($6,400). Meanwhile, Ethereum continued to plunge, dropping 19% in price to trade at £173 ($225) – its lowest in a year.
Up until Wednesday 08.00 UTC, the price of Bitcoin had been climbing slowly and consistently over the last three weeks, with many hoping that a move past £5,788 ($7,500) would finally see the asset overcome long-standing resistance. These were short-lived dreams, however, as the top cryptocurrency took a sudden 4% plunge in a single candle. The selling continued until roughly £771 ($1,000) was taken off the Bitcoin price before stabilising slightly.
Ethereum continues its struggles
Ethereum, the second largest cryptocurrency by market capitalisation, wasn’t spared either as the coin continued its plunge, falling 19% in a day to trade at £174 ($226), another 2018 trading low. and the lowest it has been since September 15, 2017.
Altcoins follow suit
As has been often the case, most altcoins usually plunge whenever Bitcoin takes a dive. This was the case today, with most altcoins deep in the red, taking 10-25% plunges. Altcoins such as EOS, Litecoin, Cardano, and Monero have lost more than 10% in the last 24 hours.
Bitcoin Cash, which recently conducted a stress test on its network, which successfully confirmed that it could handle more than 21 million transactions in a day also fell considerably, taking more than a 12% plunge to trade at £385 ($500) at present.
Putting things in perspective
The entire cryptocurrency market has yet again seen one of its steepest declines in 2018 in the last 24hours, reaching a new low since February 2018 and losing over £29 billion ($38 billion) overnight to stand at £155 billion ($202 billion). Despite analysts predicting an oncoming bull run in the last few weeks, this is indicative of the overall bearish sentiment in the market, and there are no signs that this period will be over soon.
What triggered the drop?
The steep decline of Bitcoin and other cryptocurrencies is also being attributed to a report that Goldman Sachs was planning to ditch its prospective plans to open a trading desk. A Goldman Sachs executive told Business Insider that they had not reached a conclusion on when it comes to the scope of their digital asset offering. However, given that there was never conclusive evidence that Goldman Sachs intended to open a trading desk, this piece of news doesn’t seem to be solely responsible for such a catastrophic drop. Yet, no clear trigger behind the crash can be seen.
Are we going to see recovery?
The cryptocurrency market is known to be very volatile, and it’s no surprise that we are currently seeing a dip for many digital assets, especially after last year’s great performance. Recently, the market had reacted poorly due to the initial decision by the U.S. Security Exchanges (SEC) to reject applications of 9 Bitcoin ETFs, but many remained hopeful following the news that the SEC would review these same applications. If news of an appeal comes out, we may finally see the market react positively, with institutional investors looking to get their share of the digital assets.
Cryptocurrencies have also continued to see wider adoption across the globe, with major firms looking for ways to utilize blockchain and digital assets. Satis group recently released a report about their projection of Bitcoin and other top cryptocurrencies, projecting that BTC will likely hit £75,000 ($98,000) in 5 years.
So, whatever we are seeing now is typical of such a market. The coins could dip even further, but bull runs are inevitable.