What Caused the Sharp Price Plunge of Bitcoin (BTC)?

crypto-market volatility-bitcoin-fall

Bitcoin prices dipped significantly and fell below $5,400. It has reached the lowest since last year. It declined to $5,390.12, and lost more than ten percent value and hit a fresh low for the year.

Bitcoin (BTC) Price Today – BTC / USD

Name Price24H (%)
Bitcoin (BTC)
$3,364.05
-2.24%

The downward movement started when the broader crypto market suffered serious losses. The total market value dropped from $210 billion yesterday to almost $180 billion according to a report from CoinMarketCap.

What caused the dip?

Crypto analysts explained what caused the sharp decline in price. They attributed it to technical analysis or the uncertainty surrounding the hard fork in bitcoin cash.

Other analysts emphasized that the hard fork has brought uncertainty to the mind of investors. Bitcoin Cash is presently the fourth largest cryptocurrency by market cap.

Roger Ver and Craig Wright are the major proponents of BCH. These individuals have started advocating for two separate versions of the virtual currency.

Mati Greenspan, a senior market analyst on eToro, a social trading platform told Business Insider,

The end result will most likely be a split in the network resulting in two different versions of Bitcoin Cash when both upgrades go into effect this Thursday,”

Joshua Frank, the co-founder of crypto analytics platform, TheTIE.io said,

There is a tremendous amount of FUD surrounding the Bitcoin Cash hard fork…”It seems like there is a lot of confusion in the market as to what is driving price and who will emerge as the winner in the BCHABC vs BCHSV fight,

Frank said that we had seen the FUD and the conversations on Twitter. All this is reflected by the digital currency’s sentiment volatility. It has lost its value more than three times higher than other major cryptocurrency. The tweet volume of BCH is 217% higher than the 20-day moving average.

The long and short-term sentiment of BCH remains negative with the uncertainty expressed by traders on Twitter. It will be interesting to see the role the sentiment of BCHABC vs BCHSV will play out. We can expect this to have a serious impact on price movement in the future.

 Technical Developments of the coin

Frank emphasized sentiment and other analysts pointed to the factors in the market when explaining the recent sharp drop of bitcoin.

Greenspan says,

As far as I can tell this move is more technical in nature,”

CEO of Blockforce Capital, Eric Ervin, offered a similar perspective. He said that the recent plunge of the digital currency is caused by technical moves.

He said,

“The significance of the $6,000 support level shouldn’t be understated. As the bear market has trudged along these past few months, that level has held steady… many investors have come to see it as a stop-loss measure. This would explain the large amount of liquidations that have occurred.”

Ervin also said,

Looking forward, today’s price drop may be a blessing for the asset as it could help push the market to a bottom, after which it can bounce back.

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