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Bitcoin (BTC) fell more than 11% on Wednesday to reach its lowest level since October 2017. This sudden decline comes after months of shrinking volatility leading to a prolonged period of sideways trading and stability. Currently, many theories are circulating about why the top-class cryptocurrency has taken such a dive.
"Death Candle" by Bitcoin
Looking at the chart below, one can easily glimpse the massive "candle of death" that brought the price of Bitcoin up to $ 5,600. This is the second time that the first-class cryptocurrency has fallen below the psychological price of $ 6,000. BTC is now at its lowest point in over a year.
The price collapse began with a slight decline in the late morning (UTC). However, by mid-afternoon, BTC made a huge slide in a few hours to drop well below $ 6,000.
Currently, there is no consensus on the reason for the sudden collapse in prices. However, there are some theories about what could be responsible for the fall. These include whale manipulation, breaking bear market and pressure from the upcoming Bitcoin Cash rigid fork.
Talking about Reuters Regarding the fall in prices, the head of Cryptocompare, Charlie Hayter, said:
The market was entering a wedge, with such low volatility. What you are seeing below is a bearish breakout. Sometimes when things happen, it takes a while for the real reason to become clear: a commercial exchange or a regulatory action.
Since the second quarter of 2018, BTC has maintained a range of trading interval. During this period, its volatility has fallen to its lowest level in more than two years. However, despite this stability, many technical indicators have indicated the emergence of an imminent breach, albeit without indicating in which direction.
Given the event on Wednesday, it is clear that the breakout is bearish type that plays on the predictions provided by Arthur Hayes of BitMEX. At the beginning of the year, the BitMEX CEO predicted that the first class cryptocurrency would have tested $ 5,000 before the end of the year.
Altcoin Market Plunges
In addition to BTC, the altcoin market is also experiencing similar colossal landfills. All top-ten altcoins are currently in red while the massive selloffs dominate the market. At the time of the press, Ethereum, the second-level cryptocurrency for market capitalization is struggling to stay above $ 180, down more than 14%. XRP is also another victim of the market selloff, down more than 12 percent.
Outside of the top ten, the story is the same as DASH and IOTA, both of which enjoyed stellar racing before the crash, even if they could not break their 50-EMA. The recent highballer Etheera (ETA), which has seen more than an 80,000% increase over the last two weeks, has also declined by more than eight percent.
Image courtesy of Shutterstock, Tradingview, Coinmarketcap and Coin360.
