The cryptocurrency market has slipped by over $22 billion, with Bitcoin price dropping to the $7,200 region over the past 24 hours.
The cryptocurrency market has been in a bear cycle for the past few months and the latest drop in prices of major cryptocurrencies indicate that there is no end in sight for it. Despite the numerous positive news that are coming out from the cryptocurrency world on a daily basis, the market has failed to react, with most cryptocurrencies recording losses.
The leading cryptocurrency in terms of market value, Bitcoin saw its value drop by 5% over the past 24 hours while other industry leaders like Ethereum, Ripple and Bitcoin Cash, all recorded some losses, slipping by 7% or more.
For those following the cryptocurrency market, the prices of major cryptocurrencies have been stagnant for the past few days with Bitcoin trading around the $7,600 region for the most part of it. As the prices stagnated, the trading volumes remained low, with that of Bitcoin finding it hard to cross the $5 billion thresholds again. This has led to several investors becoming uncertain about the short-term future of Bitcoin and the others.
Even though some traders had expected the Bitcoin price to bottom out around the $6,800 region, it found a strong support at $7,500 and gathered momentum around the $7,600 level and broke past the $7,700 mark.
This strong support led to some experts like Peter Brandt to predict a short-term rally for Bitcoin and the entire cryptocurrency market but the Bitcoin price never mustered the strength to push for that, making it very hard for bulls to lift the market.
The prediction of Brandt and other experts largely depended on the rising trading volumes of Bitcoin and with the volumes still down, the short momentum past the $7,700 region wasn’t going to be sustainable.
Over the past 24 hours, the Bitcoin price dipped to the $7,200 level before pulling back to $7,300 but has since then dropped again to the previous level. It will be easier for the Bitcoin price to slip to the $6,900 region than to recover to the $7,700 region. If the trading volumes of Bitcoin remains the same or even drops, then the BTC price will find itself below the $7,000 mark and a drop to the $5,000 region in the short-term will be possible.
Another catalysts, some analysts are attributing to this recent market slump, is the hack of South Korea’s fifth largest cryptocurrency exchange Coinrail. Even though the exchange ranks 88th in 24-hour daily trading volume and has a weak reputation in the country, the hack is still very significant considering the current state of the cryptocurrency market.
해킹공격시도로 인한 시스템 점검중입니다. 일부코인(펀디엑스,NPXS)이 확인되었으며 추가적인 코인피해가 있는지 여부를 확인중입니다. 추후 자세한 사항은 재공지하겠습니다 / There has been an cyber intrusion in our system. We’re confirming it and some coins(Pundi X, NPXS) are confirmed.
— coinrail (@Coinrail_Korea) June 10, 2018
Initial reports claim that the exchange has now lost roughly $35 million from the hack, though, some analysts don’t think this is a big reason for the cryptocurrency market to slip this much over the past few hours.
Willy Woo Prediction Playing Out
The current price movements of Bitcoin has been predicted by cryptocurrency researcher and analyst Willy Woo. He predicted a few days ago that the Bitcoin price would slowly bleed out from the $7,500 region to $6,500 and eventually to $5,500. He claims the low trading volume of BTC and the high volatility of the cryptocurrency market were the main reasons why Bitcoin price would keep plunging.
In his statement on May 25, Woo stated that;
I think we are gonna go to $5,500 – $5,700 next, I can’t see $7000 holding. Most likely we’ll balance a bit, then we’ll slide through. Long timeframes here, looking into June for rough timing of this to play out at a best guess. Volatility is still too high. I’m looking for a sustained low band of volatility which tends to be a signal for the end of the detox and the next accumulation phase. It’s still got some time to ride down.
Despite his short-term skepticism of the cryptocurrency market, Woo and others like him are very much optimistic about the medium and long-term potential of the market as they believe a bull run would be triggered the moment institutional investors, like hedge funds and venture capitals, come into the market.
However, the cryptocurrency market wouldn’t witness the coming in of institutional investors in flocks if the market is still in its unregulated form. Woo predicted that it is highly unlikely for them to come into the market before the last quarter of the year.
Altcoins Fall Even Harder
The fall in the price of Bitcoin is almost always followed by an even harder fall in the price of altcoins. Ethereum, which is the second leading cryptocurrency after Bitcoin, went down by 6.72% over the past 24 hours.
Ripple, Bitcoin Cash and EOS, which are the third, fourth and fifth largest cryptocurrencies by market capitalization respectively, were affected even more than Bitcoin and Ethereum. Ripple has dropped by 8.46%, Bitcoin Cash’s value slipped by 9.53% while EOS has dropped by 10.84% over the past 24 hours.
Following closely is Cardano which has dropped by 10.08% while IOTA dropped further by 13.39%. The cryptocurrencies with smaller market caps suffered the most as always.
Some traders would take advantage of the dip in the prices to purchase more cryptocurrencies and add to their portfolio as they wait for another bull run to commence. When the market will rise again is anyone’s guess but all signs indicate that the bear market might continue to play out for a while.