Bitcoin suffered a 12% drop yesterday, as the cryptocurrency market woke from its two-month slumber to wipe $25 billion off the overall value and see yearly lows for a number of coins. Across the 2080 coins on the market, at one time only three were in the green, all of them so-called stablecoins, two of which saw double-digit gains comparative to Bitcoin.
Who’s to Blame?
Three main reasons seem to have been put forward for the dump. Some put it down to the closing of the CBOE futures contracts, which has traditionally seen volatility in the past. While others went further and suggested that the crash was part of a wider manipulation involving the coming BAKKT launch. Others put the drop down to the continued Bitcoin Cash fight, which has seen threats of hashing power being taken away from Bitcoin and shifted into the various new entities of Bitcoin Cash, as suggested by Bitmain supervisor Jihan Wu:
“I have no intention to start a hash war with CSW, because if I do (by relocating hash power from btc mining to bch mining), btc price will dump below yearly support; it may even breach $5000. But since CSW is relentless, I am all in to fight till death!”
This possibility is countered however by the notion that other smaller mining pools will probably pick up the slack caused by Bitmain dropping their hashing power. The third scenario is simply that Bitcoin left the so-called ‘meme triangle’ that promised a big move in either direction, finally resolving a dispute that has divided the community for weeks as the make-or-break moment loomed.
The next few days and the weekly close will be significant. Those who had been calling for yearly lows for some time have had their cases strengthened, while others are comparing the drop to the crash in November 2017 that saw Bitcoin fall 25% and precipitate the bull run. Suggestions are that a weekly close below $5,750 (depending which exchange you look at) will usher in a prolonged bear market, while a quick push back over the $6,000 range might rectify the damage done by this drop. It takes a brave person to trade in this territory, and we may see a final flush of holders before we can finally consider the downward cycle closed.