Why did the Crypto Market experience a $ 27 billion Wipeout? Experts discuss the factors


On November 15, within 24 hours, the cryptographic market valuation fell from $ 210 billion to $ 183 billion, with over $ 27 billion in a single day.


Source: CoinMarketCap.com

Fueled by the 18% drop in the price of Bitcoin Cash (BCH), all the major cryptocurrencies in the global market began to record intense sales.

Bitcoin, which maintained a record low volatility level from August to November, fell more than 11% during the day, accelerating the downward trend of other major digital assets and small market-capitalized cryptocurrencies.

Leading investors including BKCM CEO Brian Kelly and Coinshares Meltem Demirors Executive he has declared that the war of the hash power between Bitcoin Cash and Bitcoin SV acted as an important catalyst for the strong sell-off of the cryptocurrency market.

Bitcoin Cash triggered the decline

On CNBC Fast Money, Brian Kelly he has declared investor confidence in the cryptocurrency market declined before Bitcoin Cash's fork and its civil war with Bitcoin SV:

"After a period of quiet, the lowest volatility, almost in the history of Bitcoin, things suddenly exploded, so what happened?" Bitcoin Cash, who bifurcated Bitcoin last year, is making a difficult fork. Now, when you fork hard, everyone agrees, but in this particular case, everyone is not agreeing, so we made a civil war crypt, and this involved people in the market " .

On November 15, Bitcoin Cash successfully updated its protocol on a difficult fork with community support. A controversial "hard fork" proposal called Bitcoin SV was presented by a camp led by billionaire Calvin Ayre, Craig Steven Wright and Coingeek.


Source: Coin.dance

SVPool, a mining pool managed by the SV field, extracted the first invalid block on November 16, officially creating a new chain called Bitcoin SV.

Before the conflict between Bitcoin Cash and Bitcoin SV, Craig Wright threatened to conduct a 51% attack against Bitcoin Cash and gain enough power to extract invalid blocks on the Bitcoin Cash network to sabotage the protocol.

Starting November 16th, Bitcoin ABC, the original Bitcoin Cash chain, remains ahead of Bitcoin SV in terms of hash rate and number of blocks extracted. If the next few days show ABC in front of SV, then SV is not able to conduct a 51 percent attack on BCH.


Source: Coin.dance

As such, Kelly explained that the downward trend of Bitcoin and the cryptocurrency market will probably be short-lived.

"People are worried that both Bitcoin and Bitcoin Cash markets, their networks may slow down, may not work as well, software upgrades may fail or if they end up, we'll end up having a bit of chaos People started selling, making stops, everyone got worried, the whole market calmed down – in my opinion, a very short-term event. "

The possible Bitcoin Cash did not cause the decline, the market was already weak

Crypto Rand, a cryptocurrency trader and technical analyst, told Cointelegraph that even before the Bitcoin Cash fork, Bitcoin remained above an upside support. His continuous level test brought his momentum and strength in the lower region from $ 6,000 to decline significantly.

"I do not think there's a huge conspiracy against Bitcoin behind the fall, BTC has been suspended on a slight upside support, but we can see how every time BTC touched that support it rebounded with less and less force, while a downward trend in volumes continues, which indicates a weak configuration, what it saw as stability can also be considered as a lack of strength to push new higher lows and define a stronger uptrend. "

Currently, most investors and traders on the market remain reluctant to engage in important positions or engage in high-risk, high-yield exchanges, mainly due to poor market conditions. Volumes are weak, trading activity is low and the intensity of the recent crumbling market fall has reduced the likelihood of a corrective rally.

After a valuation drop of $ 27 billion over a 24-hour period, the cryptographic market could take weeks to months of consolidation before starting an appropriate short-term rally. Uncertainty in the market has allowed the scrambled market to weaken, Crypto Rand said, adding that many alternative cryptocurrencies have performed relatively well against Bitcoin.

"The cryptography market still seems weak at this point.The uncertainty I would say is the main feeling at this time.As seen from low volumes everywhere, big traders and investors are still reluctant to take prominent positions in this scenario. One thing that I would like to highlight is the response of large cap market capitalisations against this fall in BTC.In the previous scenarios, all major digital assets have been dragged with BTC or dropped further but this time most of them are keeping their levels nicely.This is a great precedent for the whole cryptographic sphere, the alternative cryptocurrencies must set their own path and cycles in addition to the BTC moves. "

In recent months, both large cryptocurrencies and tokens have achieved BTC price trends. As a result, tokens recorded 30-60% losses against BTC, which fell 70% from January.

Further decline is inevitable

Given the weakness of the market and the intensity of daily declines in the price of the major cryptocurrencies, Crypto Rand said that a further fall in the low $ 5,000 is inevitable, speaking with Cointelegraph.

He added that while the volume of BTC has increased over the last 12-24 hours, it is not enough to demonstrate a deep configuration or trigger a corrective rally for a short-term recovery.

"In my opinion, a further fall is inevitable, with the next strong support and the minimum potential in the $ 4,800 – $ 5,000 range, yesterday's volume peak was acceptable, but not the feature of a bottom-up setup (it should be more great and print a doji candle with hammer / dragonfly / hanging). "

Also DonAlt, a cryptocurrency trader and technical analyst he has declared that if BTC fails to recover quickly in the $ 6,000 region, a further fall is likely.

"The drop happened, and now, we're practically in no-man's land, with plenty of open space underneath us, and if we can not reach the green line this week, I would expect to go lower."

However, according to Crypto Rand, a positive aspect of the correction is that cryptocurrencies have started to show independent price movements with lower dependency on BTC. In the coming weeks, it is possible that the market will see a decline in the dominance index of BTC, especially if large digital assets with market capitalization are starting to perform better.

"We'll have to wait a few more months before BTC sets its path through a potential reversal, but the alternative cryptocurrency market could take its direction to get rid of the influence of BTC. cap has been surprising so far.Press the mentioned dragonfly doji and a notorious spike in volume. "


Image source: CoinMarketCap.com

In the last hours, Ripple (XRP), Ethereum (ETH), EOS and Litecoin (LTC) recorded a price increase of between 2 and 4% compared to the US dollar, while BTC remained around $ 5,600.

They expect weeks to months of stability

In the months to come, probably during the first two quarters of 2019, Bitcoin and the rest of the encrypted market could remain in their low price range.

Rob Sluymer, a partner of Fundstrat Global Advisors, said the period of consolidation of BTC after the fall of 11% from $ 6,300 to $ 5,500 could take weeks or months. Before building a platform to start a strong medium-term rally, BTC will have to demonstrate short-term stability.

"This week's breakdown has produced significant technical damage – it will probably take weeks, if not months, to repair to create a sufficiently long-lasting" structure "to support a multi-month rally."

Sluymer's analysis echoed Willy Woo, the creator of the cryptocurrency market data provider Woobull.com, who previously said that BTC will likely remain in a low price range until the second quarter of 2019.

On November 13, before the market showed signs of a big sale, Woo he has declared the technical indicators show a weak short-term trend for BTC.

"This latest reading of our blockchains and macro market indicators is still at stake, what has changed is that NVTS has now broken its support, typically a sales signal."

Based on key indicators such as the NVT Ratio, an indicator that leverages the Bitcoin network's network activity to get an accurate assessment of BTC's short-term trend, Woo said the second quarter of 2019 will likely see the bombardment of BTC.

"By putting together the blockchain view, I suspect that the timing of a bottom may be around Q2 2019. Then we will start the real accumulation band, only afterwards, we will start a long grind towards the top".

Currently, many eminent cryptocurrency investors and analysts say that market conditions are low and sales pressure on key digital assets remains high. A quick recovery by BTC and other major cryptocurrencies could be difficult in the short term, mainly because of the sheer sell-off of the market over the last two days.

Institutional investors do not care if Bitcoin finishes 2018 for $ 3,000 or $ 10,000

In an interview with Cointelegraph, Gabor Gurbacs, a strategist and director of digital resources at VanEck, said that institutional investors are not worried that the Bitcoin terms 2018 to $ 3,000 or $ 10,000.

While the recent market crash has led retail investors and individual traders in the public cryptocurrency exchange market to panic and further lower the market, Gurbacs has said that institutional investors focus on products that provide protection against investors and strengthen the encrypted market infrastructure.

"Large financial institutions are more focused on the correct market structure than short-term price fluctuations, how do we properly evaluate digital assets, how can we keep digital assets and their ETFs available with the right market and investor protection? "Most major institutions do not really care if Bitcoin finishes 2019 at 3,000 or 10,000, I think the market structure is improving every day and the crypt starts to look more and more like commodity and stock markets."

Gurbacs shared the feeling of the BKCM CEO Brian Kelly and Meltem Dem of Coinshares, stating that the November 15 bitcoin cash forex and the hash war war between Bitcoin Cash and Bitcoin Cash SV contributed to the $ 27 billion fall in the market encrypted.

At the end of the year, sales of companies aimed at their books also played a catalytic role in the market crash, adding Gurbacs, stating that even traditional financial markets such as equity and bonds have undergone a strong correction in the last months.

"Recent market conditions: in the last 3 months [as of 11/15/2018] Bitcoin is down 17.1%, blue chips (MVDA10) – down 17.3% and small caps (MVDASC) – down 25.0%. The XRP for the same period increased by + 47.0%. However, over the past month, Bitcoin and digital assets have remained fairly stable while the equity and bond markets have undergone a significant correction. The recent turmoil is due to the combination of some systematic sales at the end of the year (which are closing the books to companies) and a mess around the Bitcoin Cash fork. "

While the Bitcoin Cash fork and the hash conflict between Bitcoin, Bitcoin Cash and Bitcoin Cash SV stabilize, the market should calm down and find stability and dynamism.

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