Note: “This analysis is an adaptation from the work of Mati Greenspan, Senior Market Analyst at eToro.”
- Volatility returns to crypto markets as BTC and other altcoins see multi-month lows
- While the real reason for this fall is still unclear, a lot of speculation fills the street.
- Several analysts have been talking about the capitulation phase and this could be the end of the bear market
- There are fears that hash wars in BCH could end up affecting BTC as the reduction in Hash rates could affect transaction costs on Bitcoin
Why did the Crypto Market Plunge?
Bitcoin and other altcoins took a severe hit on 14th November 2018 bringing an end to the multi-month stability that had kept the Bitcoin in a tight range of USD 6300 -USD 6700 range rarely moving up or down. This meltdown of the crypto street was not ordinary as it knocked of USD 10 billion in under an hour as nearly all prominent coins took a beating of at least 10 percent.
This drop baffled the street and analysts watching the markets couldn’t find a credible reason for why this plunge took place. A lot of them associated it with the BCH forking event while many others took it to extreme direction like analyst trying to peg this on Brexit, which somehow just doesn’t seem very likely.
The drop, to many, looked as a technical one still a lot of analysts still compared it as the crypto market might be entering the capitulation phase that often marks the end of a bear market. To explain Capitulation is when investors give up any previous gains in any security or market by selling their positions during periods of declines and yesterdays drop did look something like that.
With BCH forking just a few hours away, there is a looming fear that the hash wars in BCH could end up affecting BTC as any miner that switches their BTC hash over to BCH will be paying a very heavy price. Even in the unlikely event that sees a sizable reduction in Bitcoin’s hash rate, it might temporarily affect transaction costs on Bitcoin but it will probably not have any lasting effect on bitcoin’s price and certainly not its stability.
Among other news, Coindesk has launched a new tool to analyze cryptos. Looks interesting.