The bubble burst? Today this question arises at all, one way or another is related to cryptowall or just watching the exchange rate of bitcoin. In fact, today it has become completely obvious that a reckless exaggeration of course speculators and a lot of inexperienced investors over come the correction, which has long been expected.
During the day, the average rate of bitcoin fell more than 45% in the night on Friday for one BTC gave about 15.7 thousand dollars, and at the time of publication, the minimum intraday price amounted to about 10.6 thousand dollars. That is, in less than a day, the fall exceeded $ 5,000. It’s a bit faster than even the best days of the recent boom, the end of which we are now witnessing. A whole week of bitcoin fell almost two times: December 16, bitcoin overcame the level of $19 thousand, came close to $20 thousand, but today the decline has stopped a little above $10 thousand. At the moment, bitcoin managed to play almost 40% of the daily fall and it is trading slightly above $12 000.
For market analysts it becomes apparent that now is a correction of the insane growth that started at least in early November with levels of about $ 5,500, and probably a larger movement, which began in July with $2000. Of course, this pullback was long expected, and many predicted it at the end of the year, such as Dan Morehead the Manager of one close to the cryptocurrency hedge funds. However, for newcomers to the cryptocurrency world that have not experienced similar adjustments today has become a real «black Friday», the social network full panic review. At the same time, more experienced traders expect the local bottom to proceed to the procurement.
«For investors this is a test in real conditions. The basis of the situation – a mad demand for coins with limited supply, which led to the fact that inexperienced investors have steered a course above» – the analyst Oanda Corp. Was Steven (Stephen Inne).
There is a drop among many other cryptocurrencies. This was reflected in the total market capitalization, which last week fell by more than $200 billion — $ 650 billion on high 17 Dec to 420 billion at today’s low. The current value of $480 billion. However, bitcoin has become one of the leaders of the fall this week. The index of dominance of bitcoin (BDI) at the time of publication is 45.1%, a market capitalization of $220 billion, while at the peak of growth, the share of the bitcoin total capitalization exceeds 65%.
Why bitcoin is falling
On the causes of decline there are several opinions, but all of them are at the level of speculation, as no major events which could cause a collapse, in recent days did not happen, except for a few of the predictions from financial authorities, similar to what we cited above. However, words are not able to derail the multi-billion dollar market — this requires more serious factors.
According to one version, the onset of a major correction has pushed the information about the tightening of regulation in South Korea and words of the Japanese Minister.
Others believe that the fall in the price of bitcoin was affected by the overflow of Nampula and the resulting high transaction fees, vague domestic policy developers, as well as strengthening the position of the Bitcoin Cash.
The third version was that the blow struck «futures bears» among major financial players started the game against bitcoin. So, on CME and CBOE futures down on bitcoin was almost similar to what we see on the cryptocurrency exchanges, although trading volumes while contracts do not exceed 10 000 BTC.
At the same time, even worked on the CME triggers the stop trade in excess of the thresholds of the daily volatility, for which the drop stopped there much earlier than on other platforms.
The most reasonable assumption would be that all these factors came together, and it does not matter which one was the last straw.