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By Gertrude Chavez-Dreyfuss and Tom Wilson
NEW YORK / LONDON, November 14 (Reuters) – Bitcoin fell to a minimum of over a year on Wednesday, surpassing a key support level of $ 6,000 and causing a wave of sales in the digital currency and other cryptographic assets in what has been a prolonged market crash started at the beginning of this year.
Bitcoin dropped to $ 5,533.09 on the Bitstamp platform. It was down 9 percent to $ 5,690.47.
"In the last few days the consolidation process has taken place and the price has moved downwards," said Naeem Aslam, an analyst at ThinkMarkets, a multi-asset online brokerage firm.
"The break of $ 6,200 yesterday gave a clear indication that at this point there are no buyers on the bench," he added.
The weakness of Bitcoin spreads to other cryptocurrencies, with ethereum, the second largest, which falls to a minimum of two months. Ethereum had dropped 10 percent to $ 182.41.
Wednesday's sell-off in cryptocurrencies pushed the industry's market capitalization to less than $ 200 billion for the first time since around mid-September, according to data from the industry data tracker coinmarketcap.com.
"What you're seeing … it's a bearish breakout, sometimes when things happen, it takes a while for the real reason to become clear – an exchange trade or a regulatory action," said Charlie Hayter, founder of the Cryptocompare industry website in London.
Other market participants have suggested that the looming "hard fork" on Thursday or the splitting of bitcoin money – another cryptocurrency emerged from the bitcoin – into two separate currencies, also caused some volatility.
Twice a year, bitcoin cash is subject to scheduled protocol updates, including network splitting.
"For our trading activities, the hard fork has recently generated a huge interest and volume of trade, over 4 billion a day, among traders," said Ricky Li, co-founder of Crypto Trading and the company of Altonomy consulting.
Overall, analysts have said that the outlook for bitcoin remains unclear, with longer-term forecasts that depend on virtual currency becoming a reliable deposit of value or a viable payment mechanism.
However, there are growing signs of increased institutional participation in bitcoins, such as an increase in demand for a bitcoin-traded fund and an increase in the volume of bitcoin futures, analysts said. But they noted that effective participation remains low among institutional and retail investors. (Reporting by Gertrude Chavez-Dreyfuss in New York and Tom Wilson in London Editing by Chizu Nomiyama and Dan Grebler)
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