Bitcoin bounces back to its support level, market losses and more
Written by Luka Kovič on November 26, 2018
In the course of last fourteen days, Bitcoin and the crypto market has taken a pummeling, as we seen major price drops, which caused Bitcoin holders to experience losses up to $2.600 per coin.
The price of Bitcoin has dropped below $4.000 for the first time since September of last year, trading to an average price of $3.970, falling 40% in last 10 days, or staggering 80% of its all time high $20,000 back in December. The price downturn of #1 cryptocurrency also reflected on the global crypto market, experiencing losses of 18 billion U.S. Dollars, with total market cap of 132 bil., at the press time.
But Bitcoin is not the only one taking a beating, as Ethereum (ETH) and Litecoin (LTC) also reached lows of 2018 with price of $111 and $29, respectively. Other altcoins in TOP10 category have lost from 10-15% according to Coinmarketcap, with Bitcoin Cash (BCH), Stellar (XLM), Monero (XMR) and Cardano (ADA) being the worst performers.
The price drop could be due to several reasons, one of them being the discovery of price manipulation of Tether. Researchers have found out that the company have been printing Tether (USDT), cryptocurrency backed by 1 USD per coin, without any backing. This could be done to drive up market prices, so the U.S. Justice Department launched an investigation. One of the possible reasons for the downturn could be the SEC (Security and Exchange Commission) issuing its judgements on two ICOs; they had to return up to $27 million to investors, and paying $250.000 fines in addition to other penalties.
“We have made it clear that companies that issue securities through ICOs are required to comply with existing statues and rules governing the registration of securities,” said Stephanie Avakian, Co-Director of the SEC Enforcement Division.
Analysts are also mentioning another reason, that is Bitcoin Cash hard fork. The lack of consensus between Roger Ver and Craig Wright caused the coin to fork, splitting BCH community. While all this could be the reason for downturn, it might be none of the above. The market could just be correcting itself due to extreme volatility and a profusion of people investing in it.